Shares of Stamps.com Inc. (STMP) plummeted 57.77% to close at $83.65 Friday after the online shipping and postage company said its key partnership with the U.S. Postal Service has ended.
The stocks already had taken a beating during trading on Thursday after it unveiled, with little explanation, a gloomy earnings forecast for 2019.
In a conference call with analysts Thursday after the stock market closed, Kenneth Thomas McBride, Stamps.com's chairman and CEO, revealed the reason for the dismal projections, detailing the split with the USPS.
The breakup came after Stamps.com said it no longer wants to be exclusive with the Postal Service, terms that the postal service refused to accept, McBride told analysts. Stamps.com said it was looking to work with other carriers such as United Parcel Service Inc. and FedEx Corp.
"We will no longer be exclusive to the USPS and that's non-negotiable," McBride said on the earnings call.
"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," McBride said. "So basically that was our premise, is like, no matter what, this company can no longer be exclusive given the trends in the shipping market."
Stamps.com may pay a steep price for seeking independence from the USPS, with the online shipper now projecting earnings of $5.15 to $6.15 a share and revenue of $540 million to $570 million.
Analysts had been calling for earnings of $10.79 a share on just more than $689 million in revenue.