Saturday, May 20, 2006

Mastercard IPO (NYSE: MA)

One of the reasons why I am recommending trying to get into the Mastercard IPO is not just the brand name but the business model. Mastercard basically runs an oligopoly with Visa on credit card facilitation services. Oligopoly spells fat profits.

61,520,912 Shares From Issuer (Class A)
Lead Underwriter: Goldman Sachs & Co.
Price Range: $40.00 - 43.00

Dividend Policy: Expects to pay a quarterly dividend of $0.09 per Class A or Class B Share.
Use of proceeds: "...increase our capital, defend ourselves against legal and regulatory challenges, expand our role in targeted geographies and higher growth segments of the global payments industry and for other general corporate purposes" (Source: Mastercard Prospectus p.38)
$650 million will be used to repay current Class B shareholders.

Net Operating Fees for Q1: $495M (2006) vs. $412M (2005) (p.44)
Expenses For Q1: $348M (2006) vs. $307M (2005) (p.46)
Total Liability for US Merchant Lawsuit & Other Legal Settlements: $615M
Net Income: $267M (2005) vs. $238M (2004) (p.52)

Have fun reading the 250 page prospectus.


Blogger Looking4mee said...

Any date set yet on when this IPO ?

5/22/2006 6:26 PM  
Blogger Big Ben said...

Not a bad call by me. Mastercard began trading today.

5/25/2006 9:18 PM  

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