- Visa shares closed down 5.5% on Tuesday.
- A Bloomberg article claims that an antitrust lawsuit could be filed soon.
- The Dow Jones advances 0.2% on Tuesday despite weak economic data.
- Poor consumer confidence data failed to shake markets.
Visa (V) fell seriously on Tuesday afternoon after reports that the US Department of Justice (DOJ) intended to file an antitrust case against the payment processing giant for allegedly maintaining an illegal monopoly over the US debit card market.
Visa is the worst performing stock in the Dow Jones Industrial Average (DJIA) on Tuesday, down 5.5% at the time of writing. Visa stands in stark contrast to Caterpillar (CAT)which has gained almost as much in percentage terms as Visa has lost.
The DJIA gained 0.2% on Tuesday despite US consumer confidence data that surprised the market by falling from the previous month.
Visa Stock News
An article in Bloomberg on Monday night quotes insiders as saying that the DOJ’s Antitrust Division is preparing a case to sue Visa over its monopolistic practices in relation to the U.S. debit card industry. The article claims the suit will be filed as early as this week.
Since coming to power, the Biden Administration has overturned decades of lax regulation toward antitrust issues and has begun to go after many tech giants. This has included both Amazon (AMZN) like to Alphabet (GOOGL)Now it would seem to be Visa’s turn.
A year ago, the Antitrust Division sent Visa investigative demands for documents on its debit card policies. Before that, it was known since at least 2021 that the DOJ had been keeping a close eye on Visa. According to Bloomberg, the lawsuit will hit Visa for allegedly engaging in uncompetitive business practices, such as imposing exclusive contracts that prevent banks and other debit card partners from using rival payment processors.
Citi analyst Andrew Schmidt cited the “regulatory overhang” of the pending lawsuit as a reason for trading Visa shares higher. Mastercard (MA) as its top payments stock. Other analysts thought the uncertainty would simply make Visa a more affordable investment in the short term rather than hurting long-term results.
Visa and Mastercard account for 95% of the total debit card market in the U.S., with debit cards accounting for more than half of Visa’s total purchase volume.
“We believe the DOJ’s debit review will play out over a long period of time and these situations are often resolved with manageable mitigations,” Wells Fargo analyst Donald Fandetti wrote.
Visa Stock Forecast
Visa stock fell just short of a significant level on the daily chart. That’s the area near $272 where the 50-day, 100-day, and 200-day simple moving averages (SMAs) are all trending. The 50-day is now slightly below the other two, marking a bearish Golden Cross pattern.
This makes it more likely that Visa’s bad times will continue and that the stock will eventually reach the $250 to $228 demand range that saw a lot of action in 2023.
Visa stock daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
