Slight Opening-Day Gain for Western Union
Launder, William, American Banker
Shares of Western Union Co. inched upward Monday, its first day of public trading on the New York Stock Exchange.
The money transfer company's stock began trading Sept. 21 on a "when-issued" basis at $20, and closed that day at $18.30; analysts said that this transition period had largely stabilized its price. It closed Monday at $19.76, up 3.29%.
"There are no surprises today," John Kraft, an analyst at D.A. Davidson & Co., said Monday. "The when-issued trading ... ahead of time gave a pretty good idea of where things were going to turn out."
Western Union completed its long-anticipated spinoff from First Data Corp. on Friday, when approximately 765 million shares of Western Union were issued to First Data shareholders. First Data, a transaction processor, was trading at $23.25 Monday afternoon after closing Friday at $41.
Western Union announced a $1 billion stock buyback plan Friday and said that it had arranged for $3.5 billion of debt financing. The Englewood, Colo., company was also added to the S&P 500 index last week.
The spinoff "marks the beginning of an exciting new chapter in Western Union's celebrated 150-year history," Christina Gold, its president and chief executive, said Friday in a press release. Ms. Gold is scheduled to ring the opening bell at the New York Stock Exchange on Wednesday.
The spinoff did little to encourage analysts about Western Union's prospects as an independent company.
"There are a lot of issues" facing Western Union, said Roger Dodd, an analyst at Regions Financial Corp.'s Morgan Keegan & Co. Inc. "I don't expect it to be a big performer in terms of stock price."
Those issues include start-up costs, regulatory compliance, and an immigration debate that has cast a shadow over Western Union's earnings for the past two quarters.
First Data, of Denver, said last month that its third-quarter domestic transfer volume was down 4% as of Sept. …