Being Stamped Out By Shareholders

While getting his MBA at UCLA in 1996, Jim McDermott was working late so as
to mail his resumes as fast as possible. But he ran out of stamps. Yep,
this gave him the idea for

But lately, the company’s stock price has been approaching – well – the
price of a stamp. The 52-week price range is $2-5/8 – 98-1/2. Currently, the
stock price is a lowly $2-15/16.

I’m actually an avid user of the service. It definitely makes my life
easier (and no, I’m not sending out resumes). Unfortunately, the adoption
rate of the service has fallen below expectations. Somehow, people still
like to wait in line at the Post Office and lick stamps.

This is reflected in the company’s financials.In the past quarter, the
company’s sales were a mere $3.7 million. Losses? Well, they were $34.4

There are long-term concerns. For example, stamps seem like an antiquated
mechanism. With the surge in e-mail, people are relying less on written
letters. Further, more people are using automated bill paying services.
The company is also embroiled in a patent infringement suit with Pitney

But looking deeper, I think there are many bright spots. The company has
been aggressive in signing key distribution deals. Partners include
Hewlett-Packard, Microsoft and AOL. A recent deal was with Intuit. technology will be integrated in the 2001 versions of Quicken
products. has been expanding into new markets. Here are some new services:
iReturn (this helps online merchants efficiently manage large volumes of
merchandise returns); iShip (this allows employees the ability to process
shipments from the desktop, while enforcing business rules); and EncrypTix
(which allows for secure delivery and storage of tickets, travelers checks
and coupons over the Net).

But, perhaps the most interesting aspect of the company is its bank account.
As of the last quarter, the company had $333.6 million in cash. This is
very compelling, considering that the company’s current market cap is $138.1

News Around the Web