Visa stock soars 30% in debut

SAN FRANCISCO -- Catapulted by the biggest IPO in U.S. history, Visa Inc. shares soared more than 30 percent in their stock market debut Wednesday as investors bet an accelerating shift to electronic payments will enrich the world's largest processor of credit and debit cards.

After being priced above expectations at $44 per share in an initial public offering that raised nearly $18 billion, Visa shares climbed to $58.98 in afternoon trading on the New York Stock Exchange. The run-up gives the San Francisco-based company a market value of about $50 billion.

The fervor reflects investors believe Visa is in a lucrative position as more people rely on its electronic network to make payments instead of using cash and checks.

Visa generated $5.2 billion in annual revenue last year as it handled more than 44 billion transactions totaling more than $3.2 trillion. The volume puts Visa far ahead of its main rival, MasterCard Inc., whose own shares have more than quintupled from their May 2006 IPO price of $39.

Making Visa even more alluring to investors, the company is well-insulated from the credit problems that have scarred many of the lenders that issue the cards bearing its brand.

Unlike those lenders, Visa doesn't carry any consumer debt on its books. It depends on transaction fees, which have been steadily rising for years, including during the past two U.S. recessions in 1991 and 2001.

Visa anticipates earnings growth of at least 20 percent for at least the next two years.

Visa overcame the current turbulent market conditions to shatter the previous U.S. record IPO of $10.6 billion raised by AT&T Wireless eight years ago.