TheStreet.com TV Recap: Visa IPO Bad News for Mastercard

Cramer says its plans for an initial public offering could spell trouble for Mastercard.
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Mastercard's

(MA) - Get Report

magic will come to an end courtesy of credit card rival Visa, which filed documents with the

Securities and Exchange Commission

Friday outlining its plans to raise up to $10 billion in an initial public offering.

"I've liked

Mastercard

(MA) - Get Report

very much, but I don't like Mastercard in an environment where Visa is coming public," Jim Cramer said on TheStreet.com TV's Wall Street Confidential Web video Monday.

Cramer: Visa's IPO is Bad News for Mastercard

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Visa's initial public offering is a real negative for Mastercard because people can say Mastercard is done and that they'd rather be in Visa. Also, this is a horrible market to bring in an IPO, in general.

"If it's a horrible market it shows to me you really have to get this deal done no matter what," Cramer explained. "I never want to see deals have to be done no matter what because that says you'll get hurt."

He said he's become cautious on this market. The current situation, Cramer said, reminds him of 1990, where there was a sharp downturn due to credit problems related to commercial construction. "In 1990 the last thing you wanted to own was a credit card company."

Also, while Visa is a company based on transactions and on the trend of going from a paper world to a plastic one, people keep misinterpreting this, he said. They interpret Visa as if it is a

Capital One

(COF) - Get Report

, "which is really in trouble."

"It's just a poorly-timed IPO and I think it's going to take one of the few stocks that are really leading us still here, Mastercard, and make it more problematic," Cramer said. This deal is the last thing investors need now and it is not good for Mastercard.

At the time of publication, Cramer had no positions in any of the stocks mentioned, though positions can change at any time.

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