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Visa Inc. (NYSE:V) announced Friday that it has adjusted the conversion rates for its class B-1 and B-2 common stock. The change follows a $500 million deposit made Thursday into the company’s U.S. litigation escrow account, established under Visa’s U.S. retrospective responsibility plan.
According to a press release statement, the conversion rate for class B-1 common stock decreased from 1.5609 to 1.5549. The conversion rate for class B-2 common stock decreased from 1.5342 to 1.5223. Both adjustments became effective Thursday.
As a result of these changes, the as-converted share count for class B-1 common stock was reduced by approximately 28,885 shares, from 7,547,381 to 7,518,496. The as-converted share count for class B-2 common stock was reduced by approximately 1,437,724 shares, from 184,625,546 to 183,187,821.
Visa stated that these conversion rate adjustments have the same effect on earnings per share as if the company had repurchased class A common stock. The calculations were made according to Visa’s current certificate of incorporation, using the volume-weighted average price over the five-day pricing period from September 18 through September 24.
The information in this article is based on a press release statement filed with the Securities and Exchange Commission.
In other recent news, Visa Inc. reported that it has deposited $500 million into its U.S. litigation escrow account, a move that could impact the company’s earnings per share due to adjustments in the conversion rates of certain stock classes. Despite Visa’s recent financial results surpassing analyst expectations and its own guidance, Freedom Capital Markets downgraded the company’s stock rating from Buy to Hold, citing the negative impact of litigation reserves on GAAP earnings. Similarly, Erste Group also downgraded Visa’s stock from Buy to Hold, pointing to limited growth opportunities in developed markets.
In another development, Visa has launched a global Cybersecurity Advisory Practice to assist clients in managing cybersecurity threats, with Jeremiah Dewey appointed as the global head of cyber products. Meanwhile, Fold Holdings, Inc. announced a partnership with Stripe and Visa to launch the Fold Bitcoin Credit Card™, offering users up to 3.5% back in bitcoin on every purchase. This new card will allow cardholders to earn rewards with top brands like Amazon and Uber. These recent developments highlight a mix of strategic initiatives and challenges for Visa and its partners.
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