NetSpend Holdings (NASDAQ:NTSP) sells reloadable, prepaid debit cards. They allow individuals, especially the underbanked, to load the card with money and reuse it just like a normal debit card. As of June 2010, the company had approximately 2 million cards which were active. The cards are generally sold at retail locations. This allows retailers to also gain incremental value of each sale.
NetSpend has expanded to provide a range of services to the underbanked consumers. It offers the ability to use their cards anywhere where MasterCard, Visa, or PULSE network is accepted. In addition, users can withdraw funds from ATMs, pay bills, and transfer money between card holders. They also provide direct deposit and interest-bearing savings account. The company's goal is to provide to the underbanked, the same services that are available to normal individuals.
The company's initial public offering of stock on the NASDAQ occurred on October 18, 2010. The company offered 18.5M shares each for $11. This was within the initial price range of $10-$12. The IPO raised a total of $204M. The lead underwriters of the deal were Goldman Sachs Group (GS), Bank of America (BAC), and William Blair.
NetSpend has experienced a growth in net revenues since its beginning. In 2005, its total revenues was $45.7M, while in 2009, its revenue was $225M. Net income has also grown from $.7M in 2005 to $18.2M in 2009. However, while net revenues have grown consistently each year, net income fell negative in 2006 and 2008.