SCORING A VISA TO THE LAND OF REVENUE SCORING A VISA TO THE LAND OF REVENUE Several banks scored big in Visa's IPO and still have sizable stakes in the company (in millions): Raised in IPO Remaining stake JPMorgan Chase $1,261 $3,642 Bank of America $626 $1,806 National City $436 $1,259 Citigroup $300 $867 U.S. Bancorp $277 $799 Wells Fargo $273 $789 Source: USA TODAY research INVESTORS TAKE VISA INVESTORS TAKE VISA

Visa, dollars per share Huge demand for Visa's record-setting IPO sent the shares surging Wednesday even as the broader market choked on credit fears again. Not only did the world's largest credit card processor raise $17.9 billion by selling about half of itself in an initial public offering, it saw its shares gain 28% on their first day of trading. Visa (V) rose $12.50 from the initial $44 price to close at $56.50 and was the New York Stock Exchange's most-active stock. ASK MATT COLUMN: Visa stock is finally out of the barn, but don't rush in The success of the largest U.S. IPO in history and the strong interest from both professional and individual investors turned Visa into a bright spot in an otherwise choppy stock market. The Standard & Poor's 500 index fell 32 points, or 2.4%, to 1298. Observers were ready for a strong debut, given the buildup in enthusiasm since last year. "I wasn't surprised to see that level of interest," says James Owers, professor of finance at Georgia State University. "This is a marquee IPO." Visa's strong showing was encouraging in that it was: •Good news for financial companies. After the implosion of Bear Stearns, top U.S. banks needed something positive. Visa was that good news. JPMorgan Chase (JPM) and Bank of America (BAC) are the biggest holders of Visa, owning a little more than a third of the company, says Nick Einhorn, analyst at Renaissance Capital. Together, they made nearly $2 billion after the IPO was priced at $44 a share late Tuesday, above the expected initial range of $37 to $42. All the bank owners will collect about $10 billion immediately, says Michael Kon of Morningstar. But the news could have been better for the banks, points out Jay Ritter, professor of finance at the University of Florida. Shares of Visa gained so much their first day that the sellers missed out on a historic amount of money. By selling shares for $44 that were worth $56.50, the sellers left a record $5.1 billion on the table, he says. The second most left on the table was the UPS offering in 1999, which left $1.6 billion, he says. •A sign of life in a sluggish IPO market. This year, only 22 IPOs have begun trading, less than half the number in the same period last year, Renaissance Capital says. And while $22.2 billion has been raised from IPOs this year, 81% of that is from Visa. Still, Visa helped lift the poor performance of IPOs vs. the rest of the market. The Renaissance IPO index is down 25% this year, much worse than the S&P 500's 11.6% year-to-date decline. •A source of excitement for individual investors. The stock market has been responsible for a lot of portfolio destruction all year, so some investors welcomed something that rose in value. Marc Moss, a 39-year-old home builder in La Marque, Texas, has been following the Visa IPO and wanted to invest. He'd never invested in an IPO until now. Wednesday morning, Moss' discount broker, TD Ameritrade, let him buy 100 of the 500 shares he requested at the offer price. He bought 400 more shares in the open market at $59.50. He was looking forward to the IPO so much he had trouble sleeping Tuesday. "I was getting up all during the night due to the excitement for this IPO to come," he says. Morningstar's Kon thinks investors who keep a long-term outlook on the stock can still make money. Kon's price target on the stock is $74, which he thinks is obtainable if management keeps boosting the company's profit by trimming costs. There's also growth potential if more small-business owners start charging their expenses, rather than writing checks, he says. But as with any IPO, there are risks. Kon says the biggest danger would be if regulators forced Visa to reduce the fees it charges merchants to use the credit card network. "It's hard to predict what regulators will do," he says. There are also concerns about the stock's valuation. Visa's price-earnings ratio (stock price divided by earnings per share) is 25.8 times its annualized most recent quarterly earnings. That's more than twice the 12.3 P-E of the S&P 500 based on its annualized fourth-quarter earnings. That's despite the fact, Ritter says, that IPOs of companies with $500 million of revenue or more tend to underperform the market by 1.5% in the three-year period after the IPO. Some investors may have already gotten a taste of disappointment. Investors who bought Visa at its high of the day at $69 are already down 18%, Owers says. "Even a good IPO is hazardous to small-scale investors," he says. "For investors that paid $69, it may be some time before we see $69 again." Conversation guidelines: USA TODAY welcomes your thoughts, stories and information related to this article. Please stay on topic and be respectful of others. Keep the conversation appropriate for interested readers across the map.