Discover IPO Has a Weak Pulse

WALL STREET – Yesterday’s debut of Discover Financial Services on the New York Stock Exchange was a dud, as the shares traded down almost 4%, to $27.50. The initial public offering, part of the spin-off of the fourth largest cards network from Morgan Stanley, was in stark contrast to last year’s IPO for MasterCard, the second largest network, which was a huge success. MasterCard shares have quadrupled in price since going public at $39 in May 2006, closing yesterday at $166.18. Discover’s IPO came just two years after the cards company acquired Pulse EFT, the electronic funds network for 4,100 credit unions and banks, which now makes up the backbone of the Discover network. Several other payment networks are scheduled to go public later this year, including Visa USA, which plans its own IPO, and Metavante, which owns the NYCE network.