Also take note of increased insider selling past few months:
http://finance.yahoo.com/q/it?s=MA
Monday, March 3, 2008
Mastercard (MA): A Disaster Waiting To Happen...
Well I don't need to reiterate where I stand on this stock (just revisit our Feb. 5th and 7th blog posts for our thesis). Our short from $210 is working nicely and I continue to hold the position as the stock continues to make lower lows. What I'd like to note is that observing the trading action as of late, the stock looks set to gap down huge soon. I believe hedge funds are now comfortably short the stock, and what I'm looking for now is a negative headline of some sorts. Something to the effect of "Mastercard shares gap down on report of increased credit card defaults." The gap down is coming, I can feel it...i'm looking for a -15-20 point day on heavy volume soon.
http://finance.yahoo.com/q/it?s=MA
http://finance.yahoo.com/q/it?s=MA
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4 comments:
You would be a fool to short MasterCard, clearly you do not unstand their business model at all. MasterCard makes money when someone swipes their credit card as a comission, they do not extend anyone any money. That is what the banks do when they rent Mastercard platform for their credit card. This stock is going up as credit card usage will INCREASE.
I understand the model perfectly well. What I know is that when there is an increase in credit card defaults and as people approach their credit limits, the rate of usage will decline. That's all Im betting on, a decrease in the rate of growth in overall transactions. Im not saying credit card usage will decline, im just saying it will slow down from current levels. Once that happens, MAs P/E will contract and EPS estimates will be taken down. Moreover, the Visa IPO is another wild card....we'll see how that one prices. If the premium is any lower than that of MAs, then we will undoubtedly see the pairs trade of short MA, long Visa which will put added pressure on MA.
My understand is half of MA's revenue is being generated from abroad, which means its not completely dependent on the US consumer. Also, the recent drop in dollar has been helping MA in exchange rate figures.
Whats your say on that?
fool, close this blog.
you don't know anything about stocks if you don't know ma.
close the site and atleast be "not useless"
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