| 2018-10-11 14:52:37|
STMP, AMZN 14:52 10/11 10/11/18
Stamps.com rises as USPS seeks record price hike amid Trump criticism
Shares of Stamps.com (STMP) are on the rise after the U.S. Postal Service proposed the biggest price jump on stamps in its history. Facing pressure from President Trump and his administration, USPS is looking to raise the price of 1-oz. letters to 55c from 50c. If approved by regulators, the Postal Service is said to plan to also increase the shipping service cost used by Amazon (AMZN) by 9%-12%, just months after President Donald Trump criticized USPS for giving too good of a deal to the e-commerce giant. NEW PRICES FOR 2019: In a statement published on its website, the USPS said it filed notice with the Postal Regulatory Commission of price changes to take effect January 27, 2019. The proposed prices, approved by the Governors of the Postal Service, would raise Mailing Services product prices approximately 2.5%. Shipping Services price increases vary by product. For example, Priority Mail Express will increase 3.9% and Priority Mail will increase 5.9%. "Although Mailing Services price increases are based on the Consumer Price Index, Shipping Services prices are primarily adjusted according to market conditions. The Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue. First-Class Package Service, a lightweight expedited offering used primarily by businesses for fulfillment purposes, will move to zone-based pricing to better align with the cost of service and improve value based on distance. The Postal Service has some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping. Unlike some other shippers, the Postal Service does not add surcharges for fuel, residential delivery, or regular Saturday or holiday season delivery," the company said. WHAT'S NOTABLE: Back in April, President Trump issued an executive order to examine the USPS, claiming that it was on an "unsustainable financial path." Trump also criticized the Postal Service for giving Amazon too good of a deal. "I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business," he wrote in a tweet earlier this year. A USPS spokesperson told CNBC, however, that the Postal Office's proposed changes are not a response to Trump's criticism. PRICE ACTION: In a down day for the broader market, shares of Stamps.com have jumped over 4.5% to $211.98.
See Street Research during your Free Trial