Stamps.com (STMP) Stock: Tumbles On Postal Service Breakup

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Stamps.com STMP Stock News

Stamps.com Inc. (NASDAQ: STMP) is falling apart in the market today, giving up more than half of its value. The company said that it was breaking up with the United States Postal Service, upsetting investors and sending the stock on a tear for the bottom. Today, we’ll talk about:

  • The postal service breakup;
  • what we’re seeing from STMP stock as a result; and
  • what we’ll be watching for ahead. 

STMP Announces Postal Service Breakup

As mentioned above, Stamps.com is having a horrible day in the market today after announcing a breakup with the United States Postal Service. The company recently reported its financial results, coming with a rather gloomy earnings forecast for 2019. 

INvestors wondering why found out through a conference call. On the call, CEO and Chairman at STMP, Kenneth Thomas announced the details of a break up with the USPS. 

Recently, the company said that it didn’t want to be exclusive with the USPS. However, the Postal Service refused to accept these terms. As a result, the company is refocusing its efforts to work with UPS and FedEx. 

On the call, McBride, head honcho at STMP, had the following to offer:

We will no longer be exclusive to the USPS and that’s non-negotiable. 

Our customers can no longer survive on just the USPS, and we don’t see that as a viable option for the next five years. 

So basically that was our premise, is like, no matter what, the company can no longer be exclusive given the trends in the shipping market. 

What We’re Seeing From The Stock 

As investors, one of the first lessons that we learn is that the news moves the market. In the case of Stamps.com, the news was pretty painful. 

After all, the company has built a name around its relationship with the USPS. Not being able to come to an agreement sets the stage for some hard times for the company ahead. Of course, this can be seen by the dismal outlook for 2019. 

Considering this, it comes as no surprise to see that the stock is plummeting in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:09), STMP is trading at $84.39 per share after a loss of $113.69 per share or 57.40% thus far today. 

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on STMP. In particular, we’re interested in the success or lack thereof, of building relationships with UPS and FedEx and the company’s next steps considering that it’s relationship with the USPS was so important. Nonetheless, we’ll follow the story closely and bring the news to you as it breaks!

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