A watershed event is unfolding this morning in the payment card industry as MasterCard, the world’s second largest payment card network, is going public. Last night, MasterCard announced that its IPO of 61.5 million shares of its “Class A” common stock has been priced at $39 per share. The pricing was below the anticipated range of $40 to $43 per share. The Company will open trading today on the New York Stock Exchange under the trading symbol “MA.” The IPO raised $2.4 billion, the largest since 2004, surpassing Google’s IPO of $1.7 billion. The IPO represents a 46% stake in the company. MasterCard will use most of the proceeds to redeem shares held by current shareholders, mostly bank/issuers. About $650 million will be retained for business and litigation purposes. Despite the lower start, Morningstar places MasterCard’s fair market value at $80 per share.
MASTERCARD HISTORICAL ($ millions)
1Q/05 2Q/05 3Q/05 4Q/05 1Q/06
G&A: $306.6 $319.2 $350.1 $376.1 $347.8
A&M: $171.7 $231.6 $219.2 $385.5 $182.7
Net Income: $ 93.3 $120.2 $106.1 ($ 53.0) $126.7
Note: G&A: General & Administrative Expenses; A&M:
Advertising & Market Development Expenses.
Source: CardData (www.carddata.com)