Visa Inc. (V - Free Report) and fintech startup Plaid have called off their previously announced $5.3-billion merger after facing a legal challenge from the Department of Justice (DoJ). The said deal was announced on Jan 13, 2020.
Reasons Behind the Termination
Had the deal been successful, Visa would have bought Plaid’s data and the latter’s users would have lost control over the same.
Visa would have got its hands on sensitive data from hundreds of millions of people. The DOJ took this step in November 2020 to protect competition as well as individual privacy.
Strikingly, Visa’s management thinks that the combination of the companies would have been complementary and not competitive. Both companies cancelled the deal as they think that it would take time to settle.
The fintech market surged in 2020 and Plaid was no exception in benefiting from the same. The API (Application Programming Interface) startup witnessed a rise in demand for its services as more and more people were making transactions. Plaid’s wide array of network covers 11000 financial institutions across the United States, Canada, the UK and Europe.
This step by the DOJ doesn’t bode well for the overall fintech scenario, which in turn, could dampen the exit valuations of the fintech upstarts.
Nevertheless, Visa controls around 70% of the digital debit card payment market with Mastercard Incorporated (MA - Free Report) being its only competitor. Several other measures, such as clauses in its agreements with banks, mergers and acquisitions, and technological innovations poise the payments giant well for growth. It is also gaining traction from its growing presence in the cryptocurrency space, courtesy of constant partnerships and technological upgrades.
Shares of this currently Zacks Rank #3 (Hold) company have gained 6.6% in a year compared with the industry’s growth of 2.6%.
Other companies in the same space, such as PayPal Holdings, Inc. (PYPL - Free Report) and Square, Inc. (SQ - Free Report) have also rallied 39% and 91.7%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Visa Inc. (V - Free Report) and fintech startup Plaid have called off their previously announced $5.3-billion merger after facing a legal challenge from the Department of Justice (DoJ). The said deal was announced on Jan 13, 2020.
Reasons Behind the Termination
Had the deal been successful, Visa would have bought Plaid’s data and the latter’s users would have lost control over the same.
Visa would have got its hands on sensitive data from hundreds of millions of people. The DOJ took this step in November 2020 to protect competition as well as individual privacy.
Strikingly, Visa’s management thinks that the combination of the companies would have been complementary and not competitive. Both companies cancelled the deal as they think that it would take time to settle.
The fintech market surged in 2020 and Plaid was no exception in benefiting from the same. The API (Application Programming Interface) startup witnessed a rise in demand for its services as more and more people were making transactions. Plaid’s wide array of network covers 11000 financial institutions across the United States, Canada, the UK and Europe.
This step by the DOJ doesn’t bode well for the overall fintech scenario, which in turn, could dampen the exit valuations of the fintech upstarts.
Nevertheless, Visa controls around 70% of the digital debit card payment market with Mastercard Incorporated (MA - Free Report) being its only competitor. Several other measures, such as clauses in its agreements with banks, mergers and acquisitions, and technological innovations poise the payments giant well for growth. It is also gaining traction from its growing presence in the cryptocurrency space, courtesy of constant partnerships and technological upgrades.
Shares of this currently Zacks Rank #3 (Hold) company have gained 6.6% in a year compared with the industry’s growth of 2.6%.
Other companies in the same space, such as PayPal Holdings, Inc. (PYPL - Free Report) and Square, Inc. (SQ - Free Report) have also rallied 39% and 91.7%, respectively, in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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