Why Green Dot May Grab a Windfall From GoBank / Walmart Partnership

NEW YORK (TheStreet) -- Walmart (WMT)  announced a partnership with GoBank -- a subsidiary of publicly traded Green Dot (GDOT) -- last week. But the announcement may really mark a windfall for Green Dot and for investors alike.

The deal may not translate into a surge of new Walmart customers or a dramatic jump in its stock price: Walmart shares didn't go much of anywhere last week and are down 0.7% Monday. But Green Dot may benefit the most. It's a technology-based pro-consumer bank holding company that offers personal banking services through prepaid credit card products, and now will run a bank at Walmart.

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Prior to the partnership announcement with the retail giant, Green Dot was trading at just under $19. But since the agreement the stock has jumped as much as 20% to close at $22.26 on Friday and is trading in the $21.30 range Monday as of noon.

Green Dot, which hit highs of over $63 after going public in late 2010 and lows of just over $9 in 2012, has plenty of room to run. That's doubly true if the GoBank low-fee checking option leads to more customers and more banking options to retain those new customers.

GoBank and Green Dot's strategy has been to capture consumers that are fed up with the high fees from traditional bank checking services and to appeal to unbanked or under-banked customers that banks don't deem profitable.

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