The latest I’ve heard is that the case won’t start until the Fall of 2008. I don’t think the settlement will be as large as some people expect. If you look at MasterCards SEC filings it looks like they’re keeping close to 1B in the bank. I would expect the settlement to be around 1B or less.

If you look at the SEC filings MasterCard lost a court case over debit cards in 2006 and they are paying out $300m over a period of 10 years or so. I would imagine any settlement with Discover and AMX would be very similar in structure. So there won’t be a one time hit to earnings.

As a shareholder in Discover and MasterCard, I would much rather see Discover improve it’s business than have earnings one quarter boosted by a court settlement.

There are rumors that DFS might get a “substantial” settlement.

Care to comment on when and how large?

Thanks in advance.

I feel that many of the MS holders feel Discover was bad because it came with Purcell - whom they hate. They could not get rid of it fast enough.

Back in the mid 90’s they blew a lawsuit against Master & Visa which would have enhanced their market position now. They recently won a similar suit and should get some settlement soon.

They know how to make money.
With freedom to grow, they will be fine.

I estimate $1.45 - $1.50 for the next 12 months.

jmho