Unpriceable

19 May 2006 By Antony Currie Follow @AntonyMCurrie

The card network s IPO is priced at about 14 times earnings. At a discount to rivals, that seems cheap. But MasterCard faces challenges. It s losing market share, and is being sued over the fees it charges. This is not an IPO for the faint of heart.

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MasterCard's initial public offering is expected to launch next week. The company is planning to sell 61.5m shares, representing 46% of total shares. According to its most recent IPO filing with the SEC, the price range for the deal is between $40 and $43 per share.

MasterCard will give a further 10%, or 13m, of its shares as well as $40m in cash to a charity, the MasterCard Foundation. As a result, MasterCard expects to report a loss in 2006.

Last month MasterCard reported an increase in firstquarter profit of 36%, to $127m. Revenue increased 12% to $738m. For the full year 2005, MasterCard earned $267m from revenue of $2.9bn.

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