Why Green Dot Got the Green Light to Rally

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Green Dot (NYSE: GDOT  ) got the green light to rally upwards of 10% after a research report from Jefferies claimed that American Express (NYSE: AXP  ) was bailing on its competing Bluebird prepaid cards.

So what: The report indicated that American Express was withdrawing its prepaid cards out of Wal-Mart Stores (NYSE: WMT  ) , as they didn't receive a warm reception during a program to test the waters. Jefferies analysts acknowledge that they don't have official word, but its channel checks suggest that AmEx is pulling out.

Now what: That helps allay competitive fears for Green Dot, as its exclusive distribution partnership with Wal-Mart comprises the majority of its sales. As the prepaid-card market has grown, larger rivals in financial services like American Express and JPMorgan Chase have been jumping in, putting a lead on smaller companies like Green Dot. If Jefferies turns out right, then this is definitely good news for Green Dot.

Interested in more info on Green Dot? Add it to your Watchlist.

Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of JPMorgan Chase and American Express. Motley Fool newsletter services have recommended creating a write covered strangle position in American Express and creating a diagonal call position in Wal-Mart Stores. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1931129, ~/Articles/ArticleHandler.aspx, 4/20/2014 2:33:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement