When we were about to submit our publication to Seeking Alpha, we got caught with a grand surprise - a rare gift from the short selling gods.
Stamps.com vs endicia update#
UPDATE AS OF 4/27/16: We started investigating months ago when we started to suspect that the company is largely a credit card auto-renewal scheme that delivers zero value to customers. Specifically, we believe that our work shows that at least until the company comes clean about its 2015 government investigations/settlements and related business model modifications, its earnings guidance and financial statements cannot be taken seriously. We think the revelations in this report (that we believe management has been keeping hidden from investors) have the potential to send this stock plummeting. Our work on (NASDAQ: NASDAQ: STMP) has spanned several months and we believe that we are on to something big - with the stock having at least 50% downside in the near-term and 75% downside in the longer-term, as a result of a busted business model that is about to see competitive dynamics intensify meaningfully, a flawed M&A strategy, and a series of undisclosed government investigations/settlements that we believe are all likely to severely limit the company's ability to grow revenues beyond 2016. Companies go out of their way to cover up bad news, and the biggest skeletons in the closet are often buried away in court documents that regular retail investors cannot get their hands on. As readers who have followed the Friendly Bear's work on BOFI will know, we specialize in dumpster diving for hidden litigation.
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