(Adds more context, broker comment)
By Rory Gallivan
LONDON--Shares in U.K. mobile payments technology group Monitise
PLC (MONI.LN) slumped nearly 30% early Thursday after the U.S.
payments company Visa Inc. (V) said it is considering its options
over its 5.5% stake in the company.
"Given the maturation of Monitise as a company, Visa is
considering its options with respect to the investment," Visa
said.
"Visa will also be lessening its dependence on external mobile
development resources," it added.
Monitise Chief Executive Alastair Lukies stressed that the two
companies still have an ongoing relationship.
"We are honoured to have our ongoing alliance with Visa as we
continue to develop and expand our global network," he said.
Ali Farid Khwaja, a technology analyst at the investment bank
Berenberg, said Thursday's announcement by Visa is a big setback
for Monitise.
"The fact that Visa says that it is now developing the same
technology in house raises serious concerns about Monitise's
long-term viability," he said.
"Will other customers also gradually develop the same technology
in-house and move away from Monitise?" he asked.
Visa's investment in Monitise in 2009 and subsequent
collaboration with the company helped Monitise reach a market
capitalization of above 1 billion pounds earlier this year. Shares
have since progressively slid on the back of two profit warnings
and Thursday's announcement.
Visa Europe, a separate company from Visa Inc., owns 6% of
Monitise according to the Monitise website.
At 1114 GMT, Monitise shares had recovered a little ground from
earlier trading, down 8 pence, or 18%, at 35 pence valuing the
company at GBP684.5 million.
-Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter:
@RoryGallivan
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