Visa and MasterCard Shares Take a Beating
Visa (NYSE:V) shares are down 16% this week and MasterCard (NYSE:MA) has dropped 13%, could the knee jerk reaction be overdone?
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Visa (V) shares are trading at $67.83, up 0.95% or 64 cents, it stock is only 4.32% from its 52-week low. MasterCard (MA) shares are trading at $221.10, down -1.07% or $2.39 today, its stock is now 13.61% from its 52-week low.
Visa and MasterCard shares are under pressure for fear that proposed fees banks charge merchants for each transaction using a debit card could slash up to 90% of the revenue those fees generate, with Visa and Mastercard especially vulnerable to the changes.
While a lot of financial institutions will be affected if this becomes a requirement, Visa and Mastercard are especially vulnerable because merchants would be given a choice of using other networks to process transactions they now handle.
BOTTOM LINE: If you are watching MA and V shares, stay on the sidelines for now, these stocks could hit new 52-week lows and there will be high volatility until the proposed fee changes are in place.
MA & V CHART FUN