Stamps.com shed more than half its value Friday after CEO Ken McBride told analysts the company is ending an exclusive partnership with the U.S. Postal Service.
McBride blamed Amazon's entry into the shipping industry, noting during a Thursday conference call with analysts that the competition means Stamps.com wants more flexibility with its corporate clients and doesn't want to tie itself to exclusive deals. The loss of the exclusive agreement with the U.S. Postal Service "will have a short-term negative financial impact," he added.
The U.S. Postal Service told CBS News in an email, "We have no comment on this issue." Shares of Stamps.com plunged 56 percent, or more than $110, to just over $87 in Friday morning trading.
Amazon is expanding its shipping services, entering a business that has been dominated for decades by players such as the U.S. Postal Service and UPS. Its 2018 annual filing cited transportation and logistics companies as rivals, signaling the ecommerce giant is serious about these industries' growth prospects. Two years ago, it created an air hub in Kentucky, where its fleet of Prime Air cargo planes are housed.
"Amazon's track record of disrupting an industry is well established," McBride said. "So their threat should be taken very seriously by every player in the shipping industry. We are setting our corporate strategy assuming Amazon will be a big global player in shipping."
He added Stamps.com grew concerned the U.S. Postal Service would become "less competitive over time" as its government regulations and rules do "not allow its flexibility to react to business trends as rapidly as it needs to do."
The company asked the U.S. Postal Service for a non-exclusive deal, but the postal agency wouldn't accept the terms. "We will no longer be exclusive to the USPS and that's nonnegotiable," McBride said. "USPS has not agreed to accept these terms or any other terms of our partnership proposal."