Stamps.com Inc. provides Internet-based mailing and shipping solutions in the United States. The company offers mailing and shipping solutions to mail and ship various mail pieces and packages through the United States Postal Service (USPS) under the Stamps.com and Endicia brands.
I heard of stamps.com before, thought it was a cool concept, but never was intrigued enough to investigate….that's until now.
Shares of Stamps.com Inc. fall 56.4% to $86.31 on Friday after the online shipping and postage company said its key partnership with the U.S. Postal Service has ended.
But it was Stamps.com who caused the crash when it said it no longer wants to be exclusive with the Postal Service and said it was looking to work with other carriers such as United Parcel Service Inc. and FedEx Corp.
I would think this would be great news for the stock because now they don’t have to rely on one source for their income. But the reason the stock price crashed on the news was because Wall Street is now projecting earnings of $5.15 to $6.15 a share and revenue of $540 million to $570 million. These projections have been cut almost in half.
The short to medium term projections make sense because it’s going to take time and capital to establish relationships with the other carriers. Until then, investors have to take a wait and see approach, at least until price gets to the monthly demand at $62.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.