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Is Visa Really Buying Square? Visa&039s Stake in the Company

but some of those clarifications have been lost in the noise as investors rushed to square (its shares rose in the days after the first reports) and some began to predict visa will buy square. Before jumping to conclusions, let’s slow down and take a look at the facts.

  • what visa actually owns in place
  • class a shares vs. class b shares
  • where did the 10% number come from?
  • so the visa purchase is square?

what visa do you really have in place

visa owns 4.19 million square b common shares, from an investment in 2011. the company clarified that it has not bought or sold square shares since that initial investment, as some reports incorrectly stated that the shares of visa were a new investment. Additionally, Visa currently has no Class A shares (as some have misreported) and the 10% stake claimed is not entirely accurate, as we’ll explain later.

Reading: Visa investment in square

Digital transactions from the payment news source claim that there are 327.9 million square shares of Class A and Class B combined, putting Visa’s holding at approximately 1.3%.

class a shares vs. class b shares

When you think of stocks, you’re probably thinking of the kinds of stocks that are traded on the New York Stock Exchange and that the public can buy. But there can be more than one class of shares for a single company, and not all classes have to be publicly traded.

See also: Tesla Is Joining the S&P 500. Heres What That Means For You – Forbes Advisor

Different classes of shares may have different costs and benefits. for example, with square, a class a share gets one vote on shareholder decisions, while a class b share gets ten votes.

visa currently owns class b shares, but the provisions allow some of those class b shares to convert to class a shares. converting class b square shares to class a shares would mean those shares could be traded on the open market, which class b shares cannot.

where does the 10% number come from?

The widely reported 10% stake is due to a misunderstanding of the visa sec filing, in which visa reported ownership of the shares. In the filing, Visa indicated that 3.52 million (of its total of 4.19 million) Class B shares could be converted to Class A shares. in addition, visa establishes that it would be equivalent to 9.99% of the currently available class a square shares.

This calculation assumes that no other Class B Convertible Shareholders convert their shares to Class A. If they did, Visa’s share would be less, as the number of Class A shares would increase. visa clarified that its fully diluted stake (essentially, its stake if all other conversion options were exercised) in squares amounts to approximately 1%.

So, the purchase of visas is square?

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Despite what some claim, there doesn’t seem to be much evidence to indicate that a visa is looking to buy a place. In fact, some experts suggest that it may be the exact opposite: Visa may be preparing to sell its shares on the spot. (Disclosure of the potential value of shares converted to Class A may be an indication that Visa is actually preparing for that conversion. In this situation, a primary reason to convert would be that Square’s Class B shares are not publicly traded, while the actions of class a are .)

square isn’t the only payment company visa has invested in. In the summer of 2015, the company invested in another industry favorite: stripe. investments alone do not necessarily indicate an intention to buy a company.

While the payments industry has seen several acquisitions recently, including global payments which acquired heartland and tsys which bought transfirst, visa’s involvement with square has thus far been limited to investment. With no more to go on than the fact that Visa has owned a stake in Plaza since the company’s early days, it seems premature to assume that Visa is looking to buy Plaza.

If that happens, or if Visa sells its Square shares, we’ll update this article. be sure to follow us on facebook or twitter for these and other credit card processing news.

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