Green Dot up after Jefferies says Wal-Mart drops AmEx cards

Mon Jul 2, 2012 11:13pm IST

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(Reuters) - Green Dot Corp's (GDOT.N) shares rose 10 percent on Monday after Jefferies said American Express's SXP.N Bluebird cards were being pulled out of Wal-Mart (WMT.N) stores, reducing competitive pressures on the prepaid card company.

Green Dot has an exclusive distribution relationship with the world's largest retailer to provide Wal-Mart branded prepaid cards. The program accounts for more than half of Green Dot's revenue.

"While we lack official confirmation, our channel checks indicate that American Express Bluebird reloadable prepaid cards are being removed from the approximately 80 Wal-Mart locations in Western states where the cards were being piloted," Jefferies analysts Jason Kupferberg and Ramsey El-Assal said in a note on Monday.

Sales of Bluebird prepaid cards were "lackluster" compared to Green Dot's Wal-Mart MoneyCard during the pilot program, the analysts said.

Green Dot's stock has fallen 28 percent in the last six months as large financial companies such as American Express and JPMorgan (JPM.N) have entered the fast-growing prepaid card market.

The company's shares were up 10 percent at $24.30 in afternoon trade on the New York Stock Exchange.

(Reporting by Jochelle Mendonca in Bangalore; Editing by Sriraj Kalluvila)

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Comments (1)
HBall70 wrote:
This is a transparent ploy by GreenDot to save what little clout they have left. Its an attempt to get a little breathing room before the walls resume closing in on them. You know, I know, and GreenDot knows their time as a relevant player in the pre-paid space is nearly up. The Amex brand garners respect earned by taking customer protection and service seriously. This would include activities like learning the ins and outs of supporting a pre-paid card backed by the biggest name in the game… WalMart. The cards available now are a teaching tool which they’ll leverage when the actual Bluebird card arrives. The future is blue… not green.

Jul 03, 2012 4:21am IST  --  Report as abuse
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