REAWAKENING? REAWAKENING? Visa plans to sell more than half of itself in IPO Picture this: Private equity firm buys Getty Images for $2B Electronic Arts offers nearly $2 billion for Take-Two BIGGEST U.S. IPOS BIGGEST U.S. IPOS Visa's IPO would be the USA's biggest, topping these. Issuer Issue date IPO proceeds* AT&T Wireless 4/26/2000 $10.6 Kraft Foods 6/12/2001 $8.7 UPS 11/9/1999 $5.5 CIT Group 7/1/2002 $4.9 Blackstone Group 6/21/2007 $4.8 Conoco 10/21/1998 $4.4 Travelers Property Casualty 3/21/2002 $4.3 Agere Systems 3/27/2001 $4.1 Charter Communications 11/8/1999 $3.7 Goldman Sachs 5/3/1999 $3.7 * in billions Source: Thomson Financial Visa is hoping investors will open their wallets and shell out more than $16 billion for what's expected to be the biggest U.S. IPO ever. More than three months after filing plans for an initial public offering, the leading credit card processor Monday provided the much-awaited price and number of shares it expects to sell in its IPO. Q&A: How does Visa make money; how does it rank among competitors? Specifically, Visa plans to sell 406 million shares, or a little more than half the company, for $37 to $42 a share. If Visa pulls it off, its IPO will top the $10.6 billion raised by AT&T Wireless (T) in April 2000, which had been the biggest U.S. IPO, says Thomson Financial. (TOC) Visa would also rank as the third-largest global IPO, behind the $22.0 billion IPO of Industrial and Commercial Bank of China in October 2006 and the $18.1 billion NTT Mobile raised in October 1998. "It's huge. A lot of people will be watching it to see if it gets done," says Joel Greenberg, partner at law firm Kaye Scholer. If things go as planned, shares of Visa should be trading by the week of March 19. The IPO is expected to garner attention because it is: •A much-needed boost for the ailing IPO market. So far this year, just 18 companies pulled off their IPOs, down 47% from the same period last year, Renaissance Capital (RCG) says. Amid a choppy broad market, IPOs in general this year are down 16%, Renaissance says. "It's a big deal being done in a bad market," says Renaissance's Kathy Smith. •Conjuring memories of MasterCard's IPO. Visa is larger than MasterCard (MA) and processed about 60% of total transactions in 2006, according to Visa's regulatory filing. MasterCard is second with 39%. But investors hope Visa's stock will do as well as MasterCard's. MasterCard shares have soared more than 400% from their initial price of $39 in May 2006. MasterCard shares fell $5.03 to $198.45 Monday. Visa isn't a screaming bargain like MasterCard was, says Francis Gaskins of IPOdesktop. Visa's price-earnings ratio (stock price divided by earnings per share), based on the middle of its price range, is 30 times its annualized fiscal fourth-quarter earnings, he says. That's well above MasterCard's 21 P-E now and its 11 P-E at its IPO, Gaskins says. "Is this another MasterCard? The answer is no," he says. Plus, the sheer size of Visa isn't the makings of an explosive IPO, says Jay Ritter, professor of finance at the University of Florida. There are also concerns consumers may slow their spending, and keep their plastic put away, if the economy weakens. Even so, the IPO could be a much-needed windfall for Wall Street. Visa is owned by banks that could use the cash to help make up for soured bets on mortgages. JPMorgan Chase, Bank of America and Citigroup are among the biggest owners of Visa. These sellers are selling 51% of the company, which is a high percentage to sell at one time, Ritter says, adding that companies sold just 31% of themselves in IPOs last year. The banks selling their shares will raise more than $10 billion from the IPO, Gaskins says. That capital is welcome amid a credit crunch. "This is a good time to get some of this cash," Ritter says. 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.