July 2 (Reuters) - Green Dot Corp’s shares rose 10 percent on Monday after Jefferies said American Express’s Bluebird cards were being pulled out of Wal-Mart stores, reducing competitive pressures on the prepaid card company.
Green Dot has an exclusive distribution relationship with the world’s largest retailer to provide Wal-Mart branded prepaid cards. The program accounts for more than half of Green Dot’s revenue.
“While we lack official confirmation, our channel checks indicate that American Express Bluebird reloadable prepaid cards are being removed from the approximately 80 Wal-Mart locations in Western states where the cards were being piloted,” Jefferies analysts Jason Kupferberg and Ramsey El-Assal said in a note on Monday.
Sales of Bluebird prepaid cards were “lackluster” compared to Green Dot’s Wal-Mart MoneyCard during the pilot program, the analysts said.
Green Dot’s stock has fallen 28 percent in the last six months as large financial companies such as American Express and JPMorgan have entered the fast-growing prepaid card market.
The company’s shares were up 10 percent at $24.30 in afternoon trade on the New York Stock Exchange.