If our merchant antitrust litigation is successful, and the facts are on our side, Visa® and Mastercard® could face insolvency. These aren't our words, but those warning statements published in both card associations' offering documents.
However, the news of what could be the second largest IPO in U.S. history is garnering little attention. Other than a few wire service updates, so far the news has been deafeningly silent. The big news is that with the American Express® settlement solved, according to the news stories, it's clear sailing for Visa's IPO.
Not!
We think, just like with MasterCard, the thousands of banks which own Visa will try to cash out as fast as possible. So fast, that it might even topple and overturn the offering.
Last time, the member banks were not in the fiscal calamity that they face today. When MasterCard went public, the member banks were not realizing billions in mismanaged losses. Today, they are in much greater need of enhancing their capitalization; what better way than to pass off their ownership in Visa? Their earlier rush to sell off part of their MasterCard investment , and its overshadowing price-fixing litigation, turned into one more multi billion dollar fiasco - the price they set was $39.00 a share. Oops - with MasterCard nearing $200.00, it seems that nothing they do is right. Are they so distracted by our lawsuit that they have lost their focus and spirit?
Whether it was buying up the subprime housing mortgages and loosing billions, to their other poor decisions that even forced CEOs to flee, they just cannot get it right. This time, they might get extra greedy at the exit and seek an offering price that will melt even the appetites of the most drunk-on-risk thrill-seeking investors'.
Reporters are not writing about the warnings of insolvency, nor are they explaining that our litigation is a much larger threat than even their pay off to AmEx.
[Commentary: WayTooHigh.com]
