Visa seen as IPO anomaly

March 17, 2008: 04:26 PM EST

NEW YORK (AP) - As Visa Inc. (NYSE:V) readies for what promises to be the largest initial public offering in U.S. history on Wednesday, analysts generally feel it won't do much to jolt a slumbering IPO market.

'We have an IPO market anomaly with Visa,' said David Menlow, president of IPOfinancial.com. 'This is a singular seismic event that is not going to re-ignite the market as far as instill confidence or bring more deals into the system.'

Francis Gaskins, president of IPODesktop.com, agreed.

'It's a unique, one-time event,' he said. 'All eyes will be on Visa and then it's over.'

The San Francisco-based credit card processor is offering a whopping 406 million shares, which it expects to price between $37 and $42, according to filings with the Securities and Exchange Commission. The underwriters have been given the option to buy up to an additional 40.6 million shares to cover any overallotments.

In total, the IPO could raise up to nearly $19 billion -- surpassing current record holder AT&T (NYSE:SBT) (NYSE:T) Wireless, which raised $10.6 billion when it went public in 2000.

The latest market shake-up, driven by JPMorgan Chase (NYSE:JPM PRH) (NYSE:JPM PRX) (NYSE:JPM PRK) (NYSE:JPM PRJ) (NYSE:JPT) (NYSE:JPM) & Co.'s $2-per-share buyout of struggling investment bank Bear Stearns Cos. (NYSE:BSC) , could cause the IPO to price at a slight discount, but should have little effect overall, analysts said.

'I don't foresee any reduction in demand for Visa based on the takeover,' said Scott Sweet, managing director of research firm IPO Boutique.

'It might be a dollar or two per share short of what they thought they could get last week, but what is happening in the market today does not mean that Visa is not a very strong business,' said Nicholas Einhorn, an analyst at Renaissance Capital's IPOHome.com.

Instead, investors could get a better gauge of the market from two smaller IPOs on this week's calendar, he said.

CardioNet Inc. (NASDAQ:BEAT) , which makes heart monitors, seeks to raise about $61 million from an offering of 6.6 million shares.

Though the San Diego-based company has yet to post a profit, its revenue more than doubled in 2007 to $73 million from $33.9 million in the previous year.

Start-up Pogo Jet Inc. (NASDAQ:POGO) provides private jet charter service. The Chicopee, Mass.-based company plans to use the $94.6 million in expected proceeds, based on an IPO price of $14.50 per share, to fund its initial fleet of aircraft. The remaining proceeds will be used for working capital and other general corporate purposes, including the build-up and maintenance of its operating facilities.

Pogo Jet is led by Robert Crandall, who served as chairman, president and chief executive of AMR Corp. (NYSE:AAR) (NYSE:AMR) , the parent company of American Airlines, from 1985 to 1998.

These IPOs are more typical than Visa's, Einhorn said. They are unproven companies that plan to use the capital raised to invest in the business, as opposed to Visa, which is a mature, proven company.

'I think people will be watching these two companies,' he said. 'If these deals can do well, it will be in its own way another positive note for the IPO market.'

Sweet, however, isn't sold on either company.

'With people really concentrating on Visa, it's going to be a fairly tough sell,' he said. 'You've got highly established companies getting hammered right now. Why would someone want to invest in a startup?'