Stamps.com Stock Plunges More Than 50% After Losing USPS Partnership - EcoFinBiz Blog

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Stamps.com Stock Plunges More Than 50% After Losing USPS Partnership

Stamps.com has pulled out of an exclusive deal with the U.S. Postal Service--sending its stock plummeting more than 50%, or over $100--in a move meant to keep the company flexible as Amazon enters the shipping industry.

CEO Ken McBride said the decision will cause “some short-term pain for us over the next few years,” with revenue possibly slipping as much as 8% this year. According to CNN, analysts’ forecast had projected sales to increase by more than 16%.

Earlier this month, Amazon listed “transportation and logistics services” as a competitive industry on a regulatory filing, signaling that the company is about to invest in its own delivery service.

“Amazon’s track record of disrupting an industry is well established. So their threat should be taken very seriously by every player in the shipping industry,” said McBride, CNN reports. “We are setting our corporate strategy assuming Amazon will be a big global player in shipping.”

Moreover, customers are increasingly expecting two-day shipping--a convenience the USPS does not always guarantee.

“While USPS is officially an independent organization that is supported by its own revenue from mail and packages, it has many rules and regulations and governmental requirements that do not allow its flexibility to react to business trends as rapidly as it needs to do in order to keep up with the rapid pace of change in e-commerce,” said McBride in a statement, according to CNBC.

Stamps.com had offered the USPS a non-exclusive deal, but terms could not be agreed upon, ending the partnership.

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