SAN FRANCISCO – Shares in Visa Inc. continued to surge yesterday–another 15%–earning credit unions and banks who are receiving shares in the initial public offering of the world’s largest payments system tens of millions of dollars of additional profits.
But the biggest winners are JP Morgan Chase and Bank of America, two of the largest banks that will share controlling interest of the cards system after the public offering. That’s because the two banking giants were among the eight bookrunners for the IPO, and therefore were allowed to buy an additional 40.6 million of the overalloted shares at the initial price of $44 a share as part of the underwriting agreement.
After soaring 28% on their first day, Visa shares closed up again yesterday by 14%, ending the day at $64.35.
That means eight entities–including JP Morgan, BofA, Goldman Sachs, Wachovia, Citi, HSBC, Merrill Lynch and UBS–earned a two-day profit of $825 million on those shares.
JP Morgan and BofA are among six large banks that will control a 33% stake in Visa after completion of the IPO. The others are: National City Corp., Citi, US Bancorp and Wells Fargo.
The sale of the over-allotment shares means Visa earned an estimated $19.1 billion in proceeds from the offering, making it by far the largest U.S. IPO ever.
Hundreds of credit unions shared in the IPO also, receiving Class B shares that are redeemable for 0.72 publicly traded Class A shares each.
