As a giant in the payment processing industry, Visa (NYSE: V) has survived many tough economic climates similar to the economy we’re adjusting to right now.
But there’s not really a historical parallel for an event that makes the majority of a population unable to leave their homes nor engage in consumer spending outside of the house.
As a result, Visa has been, and will likely continue, relying on their high margins and enhanced ecommerce exposure to carry the majority of their business through the COVID-19 pandemic.
While this may seem like an easy task for the largest payment processing company in the United States of America, younger and faster moving competitors are quickly engendering disruption to Visa’s ecommerce market share.
For example, PayPal and Square have been looking for new partner integration opportunities to capture a larger percentage of online commercial transactions and have also been approved to distribute small-business loans through their platforms as part of the Paycheck Protection Program.
While Visa has indeed survived multiple tough economic climates, it has never had younger and faster moving enterprises compete with it as aggressively as right now; in a world where, for better or for worse, consumer spending is mostly heavily reliant on electronic payments.
As newer, alacritous enterprises such as Square and PayPal continue to compete with Visa, I expect financial professionals to adjust their visions of the payment processing industry itself.
Financial professionals often seek to own the strongest companies, while shorting the weakest ones.
If Visa continues to be outpaced by younger competitors in the ecommerce market space, financial professionals, such as portfolio managers, may consider exchanging shares of Visa for shares of Square, for example.
Indicated in the chart above, you’ll notice that Visa has essentially been trading sideways for the past six trading sessions, below $179/share resistance.
If conditions are such that Visa is Trading below $179/share in a red market, I’ll be interested in taking a short position on Visa today and collect all available profits by market close.
I believe that while the company remains a payment processing giant, in the world of ecommerce, its best days may soon be behind it.
Yours for TrackStar trading,
America’s #1 Premarket and Day Trader
P.S. Did you happen to catch AT&T yesterday? The stock made a nice move to the upside out of oversold. While trading stocks is great if it works for you, the call options I was watching… those ran for exactly 100%, in only one day.
Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.