Can the Visa and Mastercard moat be bridged?

[CorpRaider]

I think their creators could possibly take them out if they wanted.

Edited January 11, 2023 by CorpRaider

[Gamecock-YT]

Interesting that JPM sold 7.5% of their Visa B shares this quarter. Last time banks were doing that was back after the GFC when they were all hurting for money.

[Spekulatius]

53 minutes ago, Gamecock-YT said:

Interesting that JPM sold 7.5% of their Visa B shares this quarter. Last time banks were doing that was back after the GFC when they were all hurting for money.

Hm, I checked their release and it looks like they smashed the VISA piggy bank to compensate for other losses,  At least it reads that way. VISA shares have held up pretty well (as did their business) so I see how it is enticing to sell those shares, especially if you expect an economic hurricane.

 

Edited January 14, 2023 by Spekulatius

[Gamecock-YT]

40 minutes ago, Spekulatius said:

Hm, I checked their release and it looks like they smashed the VISA piggy bank to compensate for other losses,  At least it reads that way. VISA shares have held up pretty well (as did their business) so I see how it is enticing to sell those shares, especially if you expect an economic hurricane.

 

 

yeah, that's how I read it as well. Guess will be interesting if they continue to sell it down. Also, they're still on the hook for the litigation piece. It's been a blackhole as far as reaching a settlement. There's usually a quarterly/monthly payment associated with the derivative to compensate the counterparty for not being able to convert from B to A shares. Which interestingly enough, Visa just made another payment to the litigation escrow at the end of December. So pending on when the sale happened, JPM might already be in the hole if they sold before the conversion rate changed.

 

https://investor.visa.com/stock-information/class-b-c-stock-info/default.aspx 

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/1403161/000140316123000003/v-20221229.htm

 

Quote

In conjunction with the sale, the Firm entered into a derivative instrument with the purchaser of the shares, under which the Firm retained the litigation risk associated with the shares sold. The current quarter also included $874 million of net investment securities losses, compared with $52 million of net investment securities gains in the prior year. Investment securities losses reflected net losses on sales of U.S. Treasuries and mortgage-backed securities.