Shares of credit card giant Visa (NYSE: V) stock took a tumble today, falling 5% through 12:40 p.m. EDT on news that the U.S. Department of Justice is investigating the company for engaging in potentially anticompetitive practices in the debit card market, The Wall Street Journal reports this morning.
Full Answer
Why did Visa stock fall on Wednesday?
Shares of Visa ( V -4.21%) fell on Wednesday after Amazon.com ( AMZN -4.58%) told its customers they would no longer be able to pay with credit cards issued by the payment processing titan in the U.K. beginning next year. As of 3:30 p.m. ET, Visa's stock price was down more than 5%.
Will visa boost its share of debit card use?
According to "people familiar with the matter," says WSJ, it thinks Visa may have "limited merchants' ability to route debit-card transactions over card networks that are often less expensive" than Visa's own, boosting Visa's share of "lucrative" network fees on debit cards' use.
What does Amazon's pushback against Visa and MasterCard tell us?
Amazon's pushback in the U.K. also signals that any additional rate increases by Visa and Mastercard will likely meet with strong opposition. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
Are visa's higher fees causing higher prices for online shoppers?
Amazon claims that Visa's recently increased transaction processing fees are leading to higher prices for online shoppers, at a time when inflation already poses a serious threat to the economy.
Why is Mastercard stock price down?
Mastercard stock fell 3.5% on Monday, and is now down 16.1% from its July peak and down 5.6% year-to-date, an opportunity in our view. Share price weakness is due to concerns about Amazon's dispute with Visa, Fintech disintermediation and the new Omicron variant.
Is Visa a good buy today?
Bottom line: Visa stock is not a buy, as it is in a months-long consolidation with a 252.77 buy point.
Is Mastercard stock a good buy right now?
Mastercard is a great stock to protect investors who are concerned about inflation. COVID-19 could pose challenges to the global economy this year, but the world is better equipped to deal with such obstacles. Mastercard looks set to turn out a great year of both business and stock performance.
Will Mastercard stock go up?
Stock Price Forecast The 31 analysts offering 12-month price forecasts for Mastercard Inc have a median target of 440.00, with a high estimate of 480.00 and a low estimate of 357.00. The median estimate represents a +41.21% increase from the last price of 311.59.
Is Mastercard a buy or sell?
Mastercard has received a consensus rating of Buy. The company's average rating score is 2.81, and is based on 14 buy ratings, 1 hold rating, and 1 sell rating.
Is Visa a buy sell or hold?
Visa has received a consensus rating of Buy. The company's average rating score is 2.79, and is based on 19 buy ratings, 5 hold ratings, and no sell ratings.
Should I invest in Mastercard or Visa?
Visa has higher revenues, profitability, and valuation than Mastercard, but the latter has a higher revenue per share, higher EPS, and higher YoY revenue per share growth. Both companies are expected to be bullish and offer solid returns in the future.
Where will Mastercard stock be in 5 years?
With shares at $382.51, we expect shares to double to $790 in five years, including a total return of 80% (16.4% annualized) by 2024 year-end.
Is Mastercard stock overvalued?
The bottom line is that Mastercard is overvalued given its current performance. The company had a difficult year, and its financial results illustrate the strain on revenues.
When did Mastercard stock split?
Can you explain how the stock split that MasterCard announced works? MasterCard's Board of Directors declared a 10-for-1 stock split, which was effective January 21, 2014, for shareholders of record on January 9, 2014.
Is Mastercard a good dividend stock?
Prior to the recent 11% hike, Mastercard had upped its quarterly dividend by 10% in December 2020. MA has been a regular dividend paying company since 2006. This Zacks Rank #3 (Hold) leading technology company in the global payments space has grown its dividend at a eight-year CAGR of 20.5%.
What is the target price for Mastercard?
Stock Price Target MAHigh$480.00Median$440.00Low$357.00Average$431.80Current Price$357.87
An e-commerce powerhouse is pushing back against price hikes
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What happened
Shares of Visa ( NYSE:V) fell on Wednesday after Amazon.com ( NASDAQ:AMZN) told its customers they would no longer be able to pay with credit cards issued by the payment processing titan in the U.K. beginning next year.
So what
Amazon claims that Visa's recently increased transaction processing fees are leading to higher prices for online shoppers, at a time when inflation already poses a serious threat to the economy.
Now what
Visa's transaction volume in the U.K. is a relatively small part of its global operations, and Amazon accounts for just a fraction of those payments. So, even a permanent loss of Amazon's U.K. business would likely have a minimal impact on Visa's profits.
What is it exactly that the Justice Department thinks Visa has done wrong?
So what is it exactly that the Justice Department thinks Visa has done wrong? According to "people familiar with the matter," says WSJ, it thinks Visa may have "limited merchants' ability to route debit-card transactions over card networks that are often less expensive" than Visa's own, boosting Visa's share of "lucrative" network fees on debit cards' use.
Is Mastercard a Discover or Amex?
Now as for why this investigation of Visa is dragging down Mastercard stock with it -- but not AmEx or Discover -- it's worth pointing out that the Journal specifically identifies Mastercard as the subject of similar DoJ concerns, but doesn't name either AmEx or Discover.
What is it exactly that the Justice Department thinks Visa has done wrong?
So what is it exactly that the Justice Department thinks Visa has done wrong? According to "people familiar with the matter," says WSJ, it thinks Visa may have "limited merchants' ability to route debit-card transactions over card networks that are often less expensive" than Visa's own, boosting Visa's share of "lucrative" network fees on debit cards' use.
Is Mastercard a Discover or Amex?
Now as for why this investigation of Visa is dragging down Mastercard stock with it -- but not AmEx or Discover -- it's worth pointing out that the Journal specifically identifies Mastercard as the subject of similar DoJ concerns, but doesn't name either AmEx or Discover.
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