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Feb.29
7:13 PM ET
Friday, 29 Feb 2008
Game Plan: Buy Visa IPO

Cramer’s Game Plan for next week is pretty straightforward: Do whatever you can to get in on Visa’s IPO.

The Mad Money host has a feeling that Visa’s coming public offering is going to be “instant opportunity” for whoever can get it. Because the IPO market has been so shoddy lately, brokers across the country are desperate to give their clients a win and they think Visa – which will trade under the ticker ‘V’ – will be it.

To get an idea of what’s in store for Visa, look no further than its rival Mastercard [MA  Loading...      ()   ], which came public in 2006. MA has been an unbelievable winner for the folks who got in early – the stock is up 313% since the IPO and that’s off its highs. Cramer thinks Visa has the chance to yield similar, if not better, gains because it follows the same model and even beats MA in a lot of areas.

The electronic payments story is a secular trend if ever there was one and Visa is the market leader with 62% share compared to MA’s 32%. (Remember, the larger the payment network, the more attractive it looks for banks to join.) And the market for electronic payments is growing substantially as developing markets get in on the action and people across the world make the switch from paper to plastic. There were 71 billion credit card transactions in 2006, and that is expected to go to over 130 billion by 2012.

Cramer pointed out that, while Visa and Mastercard both fit into the vague and encompassing category of credit-related stocks, they are not victims of the credit crisis and should not be treated as such because they don’t actually lend anyone a dime – they just make money processing electronic payments.

The bottom line? When Wall Street you a gift, take it. Cramer recommends doing what it takes to get a piece of the Visa IPO before it hits the open market sometime in the next few weeks.


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