Just Monday of this week, VISA Stock was hitting a low of $73.25 as the markets sold off in the face of the Brexit results. That was the lowest level for the stock in late March.
Three days later VISA Stock’s price reached $76.76 as markets roared back on Wednesday. Today VISA Stock’s price is down to $74.69.
Why Visa Stock Is Dropping Today
Visa stock is dropping today due to a court ruling regarding a $5.7 billion settlement deal that is being rejected by New York appeals court.
Both MasterCard (MA) and Visa (V) stocks are dropping today on the news that new litigation is problem the next step in their ongoing battle with retailers over allegations that their credit-card fees were improperly fixed.
VISA and MasterCard Fees
Credit Card fees are a major concern of retailers and as most retailers know, fees seem to have some weird structures built in. For example there are different fees for corporate cards versus personal credit cards. There are different fees for cards from foreign countries or what are considered foreign transaction fees. There are unregulated and regulated cards. The list at times seems enclosed. Below is a list showing different types of credit and debit products which these companies earn their income from.
Visa and MasterCard Court Ruling
The appeals court indicated in their ruling that some retailers were not “adequately represented” which is why the settlement was denied. Retailers who criticised the deal including Amazon.com (AMZN), Target (TGT) and Wal-Mart (WMT). These three big retailers how a lot of sway and they believe the settlement should have been higher.
Visa Stock Dropping Today – June 30 2016
The drop in VISA Stock is the largest single day drop since Feb 8 and unless the stock rebounds by the close, it will end up being the largest drop since August 24 2015.
In the 3 month chart below you can see Monday’s close, Thursday’s rally and the decline so far today (as of 1:45 PM June 30).
Accumulation-Distribution Indicator shows that the stock is still experiencing high accumulation. Volume indicates that the stock has seen higher than average volumes for the past 4 trading days. So far today the drop is not resulting in a strong spike higher in volume.
For traders the stock falling toward the Lower Bollinger Band could be setting up a number of rebound scenarios for profiting. I am posting my trades done today to the members section but the drop in VISA Stock today I believe is an opportunity to once more set up some trades in this stellar performer.
Review VISA Stock Prior Years