🚨 BREAKING: Mastercard plans to acquire crypto startup ZeroHash for nearly $2B, per Fortune. https://t.co/FXpbkWHBSB ...

JUST IN: 💳 Mastercard to acquire crypto startup Zerohash for $2 billion - Fortune ...

JUST IN: Mastercard to acquire crypto startup Zerohash for nearly $2 billion, Fortune reports. https://t.co/b5sdBXoBCQ ...

Core Insights - Mastercard is in late-stage talks to acquire the crypto and stablecoin infrastructure startup Zerohash for between $1.5 and $2 billion, marking a significant investment in the stablecoin sector [1] - Zerohash, founded in 2017, specializes in stablecoin and blockchain infrastructure, enabling payments and crypto trading, and has previously attracted attention from other major players like Coinbase [2][4] - The stablecoin market is gaining traction, with companies like Stripe and Coinbase making substantial investments in this area, indicating a shift towards blockchain technology for payment solutions [5] Company Developments - Zerohash has raised $104 million in funding at a $1 billion valuation, backed by investors such as Interactive Brokers and Apollo, highlighting its growth potential in the crypto infrastructure space [6] - The acquisition discussions follow Mastercard's previous negotiations with BVNK, another stablecoin startup, which has now entered an exclusivity agreement with Coinbase [2][3] Industry Trends - The rise of stablecoin companies is a notable trend in the crypto industry, with significant acquisitions like Stripe's purchase of Bridge for $1.1 billion, reflecting the increasing interest in stablecoins as a future payment method [4][5] - Proponents of stablecoins argue that they provide advantages over traditional payment systems, such as faster transaction speeds and lower processing costs, although the supporting infrastructure remains underdeveloped [5]

Group 1 - Mastercard is considered a "great investment" by Jim Cramer, who rates its odds of becoming a trillion-dollar company at 50:1, with a current market cap of $517 billion [1] - The company provides a range of payment processing and related technology solutions, including credit, debit, and prepaid products, as well as digital and cross-border payment services [2] - There is a belief that certain AI stocks may offer greater upside potential compared to Mastercard, suggesting a competitive landscape in investment opportunities [3]

Core Insights - Visa's fourth-quarter results indicate a significant lead over competitors, particularly in high-margin cross-border transactions, as global travel rebounds [1][2] - Visa's U.S. payment volumes increased by 7.6%, global volumes by 8.8%, and cross-border payments surged by 12%, reflecting strong sequential improvements [2] - Revenue reached $10.7 billion, marking an 11% increase on a foreign exchange neutral basis and a 10% organic growth, surpassing both guidance and estimates [2][3] Group 1: Visa's Performance - Visa's adjusted EPS rose to $2.98, a 10% year-on-year increase, showcasing robust financial health [2] - The company maintains stable margins at 66.8%, contributing to its growth trajectory [3] - Visa is expected to continue leading in cross-border and total volume growth as 2025 approaches [3] Group 2: Competitive Landscape - Mastercard is facing tougher year-over-year comparisons, which may compress its organic growth in the latter half of 2025 [3] - Potential shifts in client portfolios, such as the possible transfer of the Apple Card to JPMorgan, could impact U.S. volume metrics for Mastercard [4] - Analyst Tien-Tsin Huang recommends an overweight position in Visa, citing its cleaner comparisons and steadier execution as advantages over Mastercard [5] Group 3: Market Outlook - The divergence in performance between Visa and Mastercard is becoming more pronounced, with Visa positioned for a 15-20% upside in stock value [5] - Both networks benefit from resilient consumer spending and stable macroeconomic trends, but Visa's current momentum is stronger [5]

Core Insights - PayPal announced significant advancements in artificial intelligence, including a partnership with OpenAI and the launch of its Agentic Commerce service [1][3][4] - The company's Q3 earnings report showed net revenue of $8.4 billion, a 6% increase year-over-year, and earnings per share of $1.34, up 12%, surpassing analyst expectations [2][8] AI Partnerships and Innovations - PayPal's collaboration with OpenAI will support ChatGPT Checkout, allowing users to complete purchases using a PayPal wallet, and will process payments for merchants using OpenAI's Instant Checkout [3] - The newly launched Agentic Commerce Services will provide payment support, order management, and AI-powered checkout features, including "agent ready" for merchants to accept payments via AI programs [4][5] - Recent partnerships include a collaboration with Mastercard to integrate Agent Pay with PayPal's digital wallet, enabling AI agents to complete transactions [6] Strategic Moves and Future Outlook - PayPal has also partnered with Google to enhance agentic shopping and commerce, embedding PayPal technology in Google's platforms and working on AI-powered shopping experiences [7] - The company plans to invest in marketing and technology for AI, which may increase costs in the near future [8]

Core Insights - Mastercard is expected to report earnings on October 30, 2025, with projected revenue growth of approximately 16% year-over-year to $8.54 billion and earnings growth of 11% to $4.32 per share, driven by increases in gross dollar volume and strong cross-border transactions [2] - The company has a current market capitalization of $500 billion, with revenue of $30 billion over the past twelve months, operating profits of $18 billion, and net income of $14 billion [3] Revenue Drivers - Revenue growth is anticipated to be fueled by robust global consumer spending and a recovery in international travel, particularly in Europe and Asia [2] - Mastercard's expanding suite of value-added services, such as data analytics and cybersecurity, is expected to contribute to revenue growth beyond core transaction fees [2] Historical Performance - Over the last five years, Mastercard has recorded 20 earnings data points, resulting in 10 positive and 10 negative one-day post-earnings returns, indicating a 50% occurrence of positive returns [5] - The median of positive one-day returns is 2.3%, while the median of negative returns is -1.8% [5] Correlation Analysis - A strategy based on understanding the correlation between short-term and medium-term returns post-earnings can be beneficial, particularly if the correlation is strong [6] - The correlation between one-day and five-day post-earnings returns can guide trading decisions, with traders potentially taking long positions if the one-day return is positive [6]

Group 1: Investment Outlook - Mastercard is highlighted as a top credit services stock to buy as the US cuts interest rates, with a Buy rating and a $735 price target from Citi analyst Bryan Keane [1] - The company is recognized for its strong position in high-margin cross-border transactions and a consistent track record of innovation, making it a compelling investment case among global network service providers [1] Group 2: Merchant Cloud Platform - On October 14, Mastercard launched the Merchant Cloud platform, which unifies its services with those of partners to help businesses navigate commerce complexities [2] - The platform supports expansion into new markets and enhances end-user experiences with solutions for credential tokenization, guest checkout fraud protection, and identity verification [2][3] - The Merchant Cloud aims to simplify commerce through a unified, scalable, secure, and open infrastructure, addressing current and future needs of merchant partners [4] Group 3: Company Overview - Mastercard is a global technology company that facilitates digital payments by connecting consumers, financial institutions, and businesses [5] - It provides a secure network for transactions via credit, debit, and prepaid cards, along with value-added services such as data insights, cybersecurity, and fraud management [5]

Core Insights - Mastercard is expected to report third-quarter 2025 results on October 30, 2025, with earnings estimated at $4.31 per share and revenues of $8.5 billion [1] - The earnings estimate has increased by a penny over the past 60 days, indicating a 10.8% year-over-year growth, while revenue is projected to grow by 15.4% [2] - For the full year 2025, revenue is estimated at $32.48 billion, reflecting a 15.3% increase, and earnings per share are projected at $16.34, an 11.9% rise year-over-year [3] Earnings Performance - Mastercard has a strong track record of exceeding earnings estimates, having beaten consensus estimates in the last four quarters with an average surprise of 3.8% [4] - The company has a positive Earnings ESP of +0.26% and a Zacks Rank of 3, indicating a likelihood of an earnings beat [5] Growth Drivers - Projected growth in Q3 2025 is attributed to strong cross-border spending, gains in contactless payments, and value-added services [8] - The Gross Dollar Volume (GDV) is expected to rise by 9.9% year-over-year, with domestic operations increasing by nearly 8% and European operations by 10.3% [9] - Switched transactions are anticipated to grow by 9.3%, driven by resilient consumer spending and increased contactless acceptance [10] - Cross-border assessments are expected to increase by 15.2%, while domestic assessments and transaction processing assessments are projected to rise by 10.8% and 13.5%, respectively [11] - Value-added Services and Solutions net revenues are estimated to grow by 21.8% year-over-year, driven by demand for consulting and marketing services [12] Cost Considerations - Adjusted operating costs are expected to rise nearly 16% year-over-year due to increased general and administrative costs, as well as advertising and marketing expenses [14] - Payments network rebates and incentives are projected to increase by 14% year-over-year [14] Stock Performance and Valuation - Mastercard's stock has increased by 8.7% year-to-date, outperforming the industry's decline of 4.8% [15] - The company's current valuation is at 30.89X forward 12-month earnings, above the industry average of 21.58X, indicating a stretched valuation compared to peers like Visa and American Express [17] Strategic Positioning - Mastercard is adapting to the digital money revolution by forming partnerships with major blockchain players, positioning itself as a bridge between traditional payments and the crypto economy [18] - Despite regulatory pressures in the U.S. and U.K., Mastercard continues to focus on digital security, fraud prevention, and value-added services [19] - The company demonstrates strong cash flow and consistent shareholder returns, highlighting its resilience and confidence in future growth [20]