When V was in the 80's and dropped 15%, it fell to $66.90. Analysts everywhere were saying with the cap on fees V would lose 10%. That would be a loss of $8.00 not the $13.74 at the lows. V has picked up $3.91 but still has about another $2.00 to gain from here if the 10% loss due to the cap on fees is considered. I think a $73.00 price target is reasonable.
tommy you are dead on the money. So many keep trying to make this about the credit card companies. What it did was give a huge buy opp for V and ma...it gave anyone short a great profit if they rode it down and sold......most hold on and now watch profit slip away
wrong tag.. as the article I posted said, the banks will probably end up making MORE after the dust settles. the $5/mo you and I are going to now have to pay (because the transaction "tax" is smaller) just means that they will add to our monthly bills.. Banks win, retailers win, consumer loses, and Visa goes on about the same. As some have posted, if this pushes the consumer toward credit cards (and just pay it off each month so it acts like a debit situation), then Visa and MC actually benefit..
law of unintended consequences..
its supposed to help the retailers,, currently the retailers have the v+ma 'tax' applied to the core product price at point of sale. once the govt slams the cc's the retailers are NOT going to give j6p back that tax,, instead the retailer will keep that upper margin to himself,, and effectively paint a stronger economy. its genious. lol,, fake,, but genious just the same.
and the funny part,,is all the dems said obama was going to take down the oil co's,, hahahaha,, he is taking down the credit system.
good point you make.. the point I was making is that whatever happens, the Durbin amendment was poorly thought out. It will not help anyone but the retailers, which is NOT the government's supposed role. It smacks of payoffs and lobbyists. (the retailers association lobbyists). Consumers will end up paying more (via the monthly charge on checking accounts) and banks will actually end up making more money, not less. The article of course says nothing about Visa/MC.. IMHO, Visa and MC will continue to provide a very useful service and get paid for it.
Wait a min...it seems everyone gets it wrong including this author. The opening line of this guys piece is as follows,
The Fed, exercising newly established regulatory power, announced on Dec. 16 that banks could not charge merchants interchange fees higher than 12 cents each time a debit card is used as payment at a store
This is not correct. What is the truth is the fed put this out for comment..nothing more...not that it was a rule as this authors suggests. Its wrong info like this that is out there.Its garbage like this that goofball shorts who have not a clue what they are talking about keep bringing up.
read this Nasdaq OMX author's post on the debit fee. The law of unintended consequences will be operating here. Read the article carefully. He gets the picture.. You have clearly forgotten what percentage of debit cards are from banks under $10 bil., the effect of the prepaid debit card, and future effects of mobile payments.. There will be NOTHING like a drop of 10% of Visa's revenues.. sir, your analysis is seriously flawed..
LOL........Did you actually believe what you just wrote??Its allways funny when yahoo posters think the guys with the masters in finance are wrong...not to boot the guy guy who wrote the bill the SEC is looking at has gone on record to say its not going to fly. mmmm..interesting. You might want to go back and do some research. It may help you understand why your profit is shrinking.
Wait, are you actually telling me that you did NOT know the Fed was going to have a decision on debit interchange and exclusivity a few weeks ago? Dude, it was the only thing every investor on the face of the planet was waiting for...if you happen to have listened to the earnings conf call a few mos ago, it was also the main topic of the conversation! This was the EASIEST SHORT EVER! Jeez man, you really need to do a bit more due diligence than just looking at silly forward contracts probably traded by morons like Najarian or Jim Cramer on cnbc
i think you are clearly misunderstanding the message...you clearly are not thinking about earnings. The only issue on V is how much revenue will be lost from debit interchange, exclusivity, and credit interchange (the latter which is coming)...so, the dumb Street analysts were saying they will only "lose 10% of revenue" (clearly they were wrong)...so if you want to be conswervative, simply take a calculator and run that 10% drop in revenue (which undoubtedly will be higher) through V's income statemnt and see what your new estimated EPS will be...then get a multiple on that, and simply tell me if 16-18x forward EPS is a fair multiple to pay for a Co that can't grow revenue past 10% annually. Just simple math guys...come on.