Visa Stock Is Worst Dow Performer. A Possible Exchange Offer Is Why.

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Visa

Stocks fell on Thursday as analysts weighed the effects of a potential exchange offer for shares held by banks.

Visa

(Symbol: V) announced After the market closed on Wednesday, the card company was in talks with shareholders, possibly allowing the big banks to convert half of Visa’s Class B shares, which are not publicly traded, into Class A shares, which trade in New York. Market currency. If the plan goes ahead, holders of all Class A, B and C shares will have the opportunity to vote on the proposed amendment, Visa said. Class B shares are held by domestic banks, while Class C shares, also not publicly traded, are held by non-US banks.

With its 2008 initial public offering, Visa created a three-tier common stock structure consisting of Class A, B and C shares. Class B stock was created to protect Class A and Class C holders from certain pre-IPO litigation.

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Morgan Stanley analyst James Fawcett said in a research note Thursday that he believes the exchange offer will be “beneficial” for all Visa shareholders.

“For Class A and C shareholders, the exchange will reduce the uncertainty associated with the uncertainty of when and how the Class B shares will convert and become publicly traded,” Faucette said.

Fouquet set an overweight price target on Visa stock at $292.

Not everyone on Wall Street agrees. Jefferies analyst Trevor Williams has a $280 price target on Visa stock, but wrote in a research note Thursday that he believes the exchange will create pressure for the stock.

Visa stock is down 2.7% to $241.49 on Thursday. The stock was an excellent performer in

Dow Jones Industrial Average
and the second worst performance in

S&P 500

Write to Angela Palumbo at [email protected]