Catapulted by the biggest initial public offering in American history, Visa shares soared 28 percent in their stock market debut on Wednesday as investors bet an accelerating shift to electronic payments will enrich the company.
After being priced above expectations at $44 a share in an initial public offering that raised nearly $18 billion, Visa shares finished at $56.50 on the New York Stock Exchange Wednesday. The run-up gives the San Francisco-based company, the world’s largest processor of credit and debit cards, a market value of about $45 billion.
“This is an exciting and historic day for Visa,” said the company’s chairman, Joseph W. Saunders, who received a $10.2 million bonus last year for laying the I.P.O. groundwork.
Visa generated $5.2 billion in annual revenue last year as it handled more than more than 44 billion transactions totaling more than $3.2 trillion. The volume puts Visa far ahead of its main rival, MasterCard, whose own shares have risen more than fivefold since their May 2006 initial price of $39; MasterCard closed on Wednesday at $208.39.
Visa is well insulated from the credit problems that have scarred many of the lenders that issue the cards bearing its brand.
Unlike those lenders, Visa carries no consumer debt on its books. It depends on transaction fees, which have been steadily rising for years, including during the past two United States recessions in 1991 and 2001.
Visa expects annual earnings growth of at least 20 percent for at least the next two years. The company got off to a fast start in its fiscal first quarter ending in December with profit of $424 million, up 70 percent from the previous year.
Visa has earmarked more than $10 billion of the proceeds to buy back shares from the banks that helped build up its network over the last 50 years. The biggest chunk, about $1.25 billion, will be paid to its largest customer and shareholder, JPMorgan Chase.
