Weeeeeeeeeeee! — that would be the sound of Visa’s stock sliding from it’s opening high of $68 this morning to current levels around $58.

If you managed to grab Visa (V: NYSE) at its pricing last night, congratulations. You’ve already seen a 31% gain.

But if you’re like the rest of us shlubs and had to sit on the sidelines while Visa drew in a U.S. IPO record of $17.9 billion with a pricing of $44 per share ($2 above its original range of $37 – $42), I hope you were able to buy into the stock when it fell $10 from its open price about 30 minutes after the market opened this morning.

Gleeful traders sold out of the stock early after seeing it open so high. And the long-term players came in to pick up shares and boost the stock price marginally from a low of $55 to, well, now it’s almost at $59.

Visa IPO: It’s all a matter of perspective

I’ve been watching Chinese stocks too long. And I no longer have a sense of proportion for American IPOs. If a stock doesn’t at least double in price on its first day of trading, and receive 400% oversubscription, I’m unimpressed.

The Visa IPO certainly wasn’t the glorious rout all of us were hoping for. Nothing exploded. And little to no “soaring” occurred. But I suppose pinning all of our market desires on one IPO is asking a bit much.

It was a healthy IPO. It provided a valuable new stock to the market and did manage to fulfill all of its owners’ dreams.

The banks that control Visa will walk away from the IPO with a good amount of new pocket money, including largest-shareholder JP Morgan’s $1.1 billion payout from the issue. And Visa has a new resource for liability “insurance” in the form of a $3 billion lawsuit fund socked away for the rainy days of litigation that could possibly be ahead.

But our hopes for Visa were partially pinned on the success of Mastercard’s IPO two years ago. And we have to remember that Mastercard came out of the gate stumbling. It bounced up and down through its first two months of trading before the share price took off in July 2006.

Visa IPO: Look beyond the first day

Perhaps Visa’s IPO performance is less important than the performance of shares over the coming year. If it’s anything like Mastercard, you have until about mid-May to buy shares before the boom starts (of course, that’s also the beginning of the summer doldrums… ).

And Visa is still a solid company to own through the current American market melee. If Congress gets its way, the company may have to give up some of its U.S. profits. But that would be why the company is concentrating so hard on pushing into foreign markets these days.

Visa operates networks in 231 countries. And it recently reorganized to bring all of its foreign affiliates (excluding Visa Europe, which has the snooty, picky EU to deal with and is now a licensee to its parent company) under the umbrella of Visa Inc.

Possibly, Visa saw a future government clampdown before the rest of us noticed it and decided to refashion itself in preparation. Or maybe it just wanted to streamline its inner workings before it went public.

Either way, the change will prove to be a brilliant one if the legislation does go through. Visa will be able to concentrate on building up its foreign networks and pull in profits, while Mastercard and other credit card companies (both the card issuers and the credit issuers) flounder for new revenue sources.

Visa IPO: The best is yet to come

And don’t forget that, no matter how far the banks fall in the current crisis, Visa won’t feel it. Some of the company’s owners may have to sell their shares (or themselves), but that shouldn’t affect Visa’s services or its profit sources.

Banks won’t be signing out of their Visa service agreements (can you really imagine a bank not offering a check or credit card these days, even if it is circling the drain?). And while people in the U.S. may be more careful about how and what they spend, Visa’s foreign customers, especially those in India, China and Brazil, will be discovering credit and the idea of plastic money for the first time.

Visa is a good investment, despite sliding down to close at $56.50 this afternoon. Even if you didn’t get into the IPO, the stock is going to thrive in an industry that’s taking a nosedive. Money from other credit card companies will pile into Visa, and the market will build up the stock as it tears down Visa’s competitors.

Stephanie Grimmett
Today’s Financial News