Visa shares hit an all-time high on Friday of $89.69 as momentum builds around the stock's inclusion into the S&P 500 Index.
The shares have been building momemtum all week as index funds will be forced to buy shares in Visa once it becomes part of the index on Friday, December 18. S&P made the annoucement of the changes to its indexes on December 11.
It is worth noting that S&P classifies Visa as an Information Technology stock and not as a Financial company. The logic behind this is that Visa is involved in data processing and transactions management via its payment network. Visa does not assume any credit risk when people use their cards.
Fact: Visa does not issue cards, extend credit or set rates and fees for consumers. Visa’s products enable banks to offer consumers choices: Pay now with debit, or later with credit products. In fact, 70% of Visa payment transactions in the United States are not credit, but debit and prepaid cards. Therefore, Visa's customers are financial instituations not individual cardholders.
A Year Already?
15 hours ago
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"We estimate that about 51.3 million shares of Visa will need to be bought by S&P 500 index funds. Visa's 1-month average daily trading volume is about 4 million shares, implying about 13 days of buying volume," according to analysts at Keefe Bruyette & Woods.
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Visa finally made a new 52 week high today at $90.93 after going sideways since this post (Dec. 20, 2009)
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