Green Dot shares crushed by Walmart deal
October 8, 2012: 10:43 AM ET
Shares of Green Dot plunged Monday after American Express and Walmart announced plans to launch a competing prepaid card service called Bluebird.
Green Dot (GDOT) shares tumbled $2.60, or 20%, to end at $10.25.
American Express (AXP) and Walmart (WMT) said Monday that they will start offering consumers "alternative" checking and debit card services online and at more than 4,000 Walmart stores.
Related: Walmart and American Express launch prepaid card
The move is a significant invasion of Green Dot's territory.
The Monrovia, Calif.-based provider of prepaid debit cards drew 62% of its revenue from products sold at Walmart in the three months ended June 30, according to a recent regulatory filing.
Walmart did not say it would stop selling Green Dot products, but Green Dot acknowledged in its filing that its dependence on the world's largest retailer is a risk.
"The loss of a significant retail distributor could have a material adverse effect upon our card sales, profitability, and revenue growth," the Green Dot filing states.
The deal between one of the largest credit card providers and the world's largest retailer also rattled investors in NetSpend, another pre-paid card provider. Shares of Netspend (NTSP) fell nearly 7%.
