New York – Shares of Stamps.com Inc lost half their value on Friday after the online postage service provider said it ended its partnership with the U.S. Postal Service, a key source of revenue for the company.
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Stamps.com, which allows customers to print U.S. Postal Service-approved postage at discounted rates, also forecast 2019 adjusted earnings per share to fall between 48 percent and 56 percent.
The stock was down about 55 percent at $85.80 in trading, it had risen 27.3 percent this year.
“We’ve decided to discontinue our shipping partnership with the USPS so that we can fully embrace partnerships with other carriers,” Chief Executive Officer Kenneth McBride said on a conference call with analysts after the bell on Thursday.
Stamps.com said it is looking to create partnerships with other prominent package delivery companies including United Parcel Service Inc and FedEx Corp.
Ending its partnership with USPS will allow Stamps.com to offer a diverse set of services as per customers needs, which may not have been possible under an exclusive partnership with USPS, the company said.
“It really untied our hands to be able to focus on what is really in the best interest of the customer, both from a package perspective and also from a technology perspective,” McBride said.