Thursday, May 04, 2006

Banks Set to Bolt From MasterCard Inc.® on May 22 (

Bloomberg reported on May 4th that "proceeds from the [MasterCard International Inc.] transaction will be used to buy out 1,400 financial institutions that own the company and use its network to process customers' purchases. The IPO is scheduled for the week of May 22."

One thing easy about this planned IPO is how to remember the listing of the company's stock symbol "MA." Just think of "MA" as Merchant Antitrust.

The planned IPO enables the 1,400 banks who currently own MasterCard Inc.® to attempt a shifty hedge by vaulting away from tens-of-billions of dollars in potential legal liabilities. But, what about the list of risk factors, including this quote from MasterCard Inc's. Amended S-1 Registration Statement?: "If we are ultimately unsuccessful in our defense of interchange fees, such regulation may have a material adverse impact on our revenue, our prospects for future growth, and our overall business."

While MasterCard Inc's® investor roadshows will serve up gourmet fare and be hosted at world-class swank venues, lots of alcohol will be needed to sooth and distract potential investors from noticing the IPO risk factors. As this scheme to distance itself from the antitrust litigation now appears to be moving forward, the company remains anchored in litigation and a class-action suit pitting most of their merchant customers against the credit card company.

Even as an independent company, MasterCard Inc®. retains its prior liabilities.

In MasterCard Inc.'s® own words: "If we are found liable ... [loosing the litigation may] cause us to become insolvent, and result in a significant reduction in the value, or the complete loss, of your investment...."

As longtime business leaders, our familiarity with how public relations and advocacy firms serve multi-national giants, sparked our interest as spectators. Separate from our role as lead plaintiffs in the merchant interchange litigation, as co-editors of - The Credit Card Interchange Report, we are prepared to witness some extraordinary theatrics to soften and water down the risk factors. How do you water down cautions like "complete loss?"

Even participants on the hit television show "Fear Factor" would be challenged to solve these risk factors. How will the IPO roadshow, which the Wall Street Journal reports might began as early as next week excite investor interest? This entire business model faces tens-of-billions of dollars in alleged antitrust price-fixing violations

From the regular daily visits to this site from public relations and other advocacy firms, we expect a battle of words is poised to be engaged. Plus, many full-page advertisements in the financial papers to promote this offering. But, thanks to the Internet, with the push of a single button, this message along with many other balanced points of view are immediately disseminated and read across the globe.