MasterCard's Massive IPO

The market is waiting for one of the biggest IPO's in recent memory from MasterCard international, the credit card giant. "MasterCard plans to offer 61.5 million shares at $40 to $43 a share as the 40-year-old credit card firm completes its transition from a membership association jointly owned by banks to a public company. "

The multiple on the pricing is expected to be in the 11x 2006 annualized earnings, which is pretty cheap, although financial services companies tend to trade at multiples lower than the market as a whole.

The big question is going to be how much more can MasterCard grow and how fast? Given the competition in the U.S. (American Express, Discover now have the ability to issue their cards through banks), many see the international markets as a foray that MasterCard will have to be successful in in order for it to compete.

The hope is that MasterCard's debut in the public markets will be better than the debut of Vonage, whose shares have tanked today.