Visa Inc. (NYSE: V) is set to go public tomorrow in what promises to be the largest initial public offering in U.S. history. Shares are expected to price at $44 per share in a $10.2 billion IPO that is second only to Commercial Bank of China's $22 billion IPo in 2006. Many investors are bullish on the offering after MasterCard (NYSE: MA) shares more than tripled since its offering in 2006 while both companies have been posting spectacular growth numbers.

The first concern that many investors cite with Visa is the poor economy, but this is a relatively insignificant issue for several reasons. It is important to realize that companies like Visa and MasterCard have been able to thrive during the credit crisis because they do not extend credit to cardholders. Instead, it is the issuing banks that take on the credit risks and are now facing defaults. Visa makes the majority of its income by charging vendors a small transaction fee each time a card is used.

The second major concern is that consumer spending is in decline and will hurt earnings. It is true that consumer spending is down, but credit card usage isn't slowing down at all. In fact, industry reports show that usage is on the rise. More than 55% of all U.S. transactions by 2011 will take place with credit cards compared to just 40% in 2005. Spending on luxury goods may be slowing, but consumers are starting to use credit cards for even their staple purchases like food and gas.

The third major concern is that the IPO will be too expensive to buy directly. The Visa IPO has been anticipated for quite some time, so it is likely that shares will soar on their first day of trading. As a result, many investors pushed their funds into rivals like MasterCard in order to benefit from the so-called "peer upside" that often affects related companies. Other investors put their money in companies that stand to directly benefit from the IPO. These companies include JP Morgan Chase (NYSE: JPM), which will cash in $1.3 billion, and others like Bank of America (NYSE: BAC).

In the end, the Visa IPO is one of the most anticipated one on Wall Street this year and will set the mood for a long time to come. The company itself is safe from many of the credit concerns facing the economy and will likely maintain its impressive growth rate. However, the popularity will likely push shares up and force many investors to take positions in other companies that may benefit from the rise. Combined, these factors make V a stock worth watching!

Related Companies
Ameriprise Financial, Inc. (AMP)
Global Payments Inc. (GPN)
Gartner, Inc. (IT)
Heartland Payment Systems, Inc. (HPY)
UnionBanCal Corporation (UB)
American Express Company (AXP)

Conseco Inc. (NYSE: CNO) plans to stick to its guns after being pressured to give up two board seats to Steel Partners. The activist hedge fund demanded two board seats in order to effect a review of strategic alternatives for the troubled insurance company. However, Conseco revealed today that it has been reviewing such alternatives for several months and has engaged Morgan Stanley as its strategic advisor through the process.

Conseco CEO Jim Prieur said, "We share with Steel Partners, as well as our other shareholders, a common interest in taking actions that will increase the value of the company for shareholders. In that regard, we have been working with a major investment bank for several months regarding strategic alternatives and plans to maximize shareholder value for Conseco. We believe, and hope Steel Partners would concur, that we already are exploring courses of action suggested by them."

Conseco also revealed fourth quarter numbers yesterday that many viewed as highly disappointing. The insurance company posted a net loss of $72.2 million, or 39 cents per share, including a $23 million net realized investment loss and a $68 million valuation allowance for deferred tax assets. Conseco faces a considerable amount of work ahead as it stabilizes its fundamentals while working with the SEC to correct any past errors.

In the end, shares are up today after yesterday's drop because Conseco appears to be dedicated to conducting a review of its strategic alternatives. Typically, this means that managmenet would be open to a sale that could unlock substantial value for shareholders. Since the stock is artificially depressed for non-material reasons, the likelihood of a strategic or financial buyer is significantly enhanced. This makes CNO a stock worth watching!

Related Companies
Genworth Financial, Inc. (GNW)
Torchmark Corporation (TMK)
StanCorp Financial Group, Inc. (SFG)
American National Insurance Company (ANAT)
FBL Financial Group (FFG)
Lincoln National Corporation (LNC)
Presidential Life Corp. (PLFE)

The airline industry may be ripe for mergers financially, but pilots are finding themselves unwilling to negotiate. Delta Air Lines (NYSE: DAL) announced an overhaul of its operations today after talks with Northwest Airlines (NYSE: NWA) have reportedly hit a stalemate. The move should help the airline reduce its costs while it continues to work towards finding a potential suitor that would give it financial economies of scale.

A letter from Lee Moak, head of the Delta pilots union, said that the carriers haven't been able to negotiate a benefits and seniority agreement that satisfies both ends. It also refers to the discussions in the past tense, which suggests that further talks are not likely for the time being. This didn't come as a surprise to many investors as reports in the past indicated that negotiations were moving slowly on the negotiation of a key agreement.

Meanwhile, Delta announced that it will offer voluntary severance payouts to roughly 30,000 employees and cut domestic capacity by an extra 5 percent this year as part of its plan to deal with soaring fuel costs. A memo to employees noted that the airline's goal is to cut 2,000 frontline, administrative and management jobs through the voluntary program and other initiatives. The move will eliminate more than half of its 55,044 person workforce.

Fuel costs are beginning to become a serious problem for airlines, especially after OPEC announced that it would not raise production levels for the year. Delta's actions followed other initiatives like fare hikes and reduced routes by Northwest and Continental as airlines struggle to remain profitable. So far, Southwest Airlines (NYSE: LUV) remains as one of the only truly profitable airline despite recent grounded planes.

In the end, airlines are still facing many problems with high costs that need to be solved. A merger may have solved some of these problems by enabling the airlines to obtain an economies of scale whereby costs could be lowered through bulk purchasing of fuel and different routes could be combined to increase efficiency. Unfortunately, while the deal may have worked out financially, pilots shot it down once again. However, this is still a situation worth watching in case talks resume.

Related Companies
JetBlue Airways Corporation (JBLU)
US Airways Group, Inc. (LCC)
Frontier Airlines Holdings, Inc. (FRNT)
AirTran Holdings, Inc. (AAI)
UAL Corporation (UAUA)
Continental Airlines, Inc. (CAL)