Stamps.com stock falls after warning its deal with USPS could change

Lawrence K. Ho | Los Angeles Times | Getty Images

Ken McBride, stamps.com CEO and Chairman at the company’s headquarter in El Segundo on Mar. 13, 2013. 

Stamps.com was down more than 7 percent shortly after Thursday’s open following its disclosure that the United States Postal Service requested to renegotiate one of their key arrangements.

“While we believe that this agreement is mutually beneficial to the USPS and to us, there is a risk that renegotiation is unsuccessful and leads to materially less favorable terms or that the USPS decides to not renew one or more of these financial compensation arrangements,” Stamps.com said in its quarterly SEC filing. “In such case, our revenue and operating results will be materially affected unless we are successful in timely replacing the lost revenue with similar compensation from other potential partners.”

The USPS has service agreements with private companies where they can receive special rates. However, as Stamps.com noted in the filing, the USPS can always decide to renegotiate, discontinue or terminate those agreements.

Prior to this disclosure, Stamps.com saw its stock price increase by 36 percent in 2018.