Stamps.com down after PhotoStamps restricted

By: Associated Press | Thursday, September 23, 2004 6:26 PM PDT ∞

NEW YORK -- The stock of Stamps.com Inc. continued its fall Thursday, amid questions over whether its popular new service that allows customers to print stamps with photos would be allowed to continue.

Shares of the Santa Monica, Calif., postage company closed at $13.56, down $1.69, or 11 percent, on the Nasdaq Stock Market. On Wednesday, the shares fell 8.7 percent.

The shares jumped 78 percent between Aug. 13 and Sept. 2 on news of strong sales of its personalized stamps and reports of insider stock buying. It set a 52-week high of $17.75 on Sept. 13.

The year-low of $8.24 was set on Nov. 11.

Stamps.com launched the PhotoStamps concept on Aug. 10. It allows consumers to print personalized images on legal postage stamps using a home computer printer. It's in a trial phase that ends Sept. 30.

Stamps.com changed a policy last week to say that it will only print images of babies, preteens, pets, landscapes, wildlife, vehicles and graphics representing businesses or charities on valid postage.

Company officials could not be reached for comment.

The company's decision not to publish images of adults and teens came after muckraking Web site The Smoking Gun claimed to have published notorious figures such as Unabomber Ted Kaczynski and former White House intern Monica Lewinsky on valid U.S. postage.

Thursday, Stamps.com said it was in "active discussion" to extend the two-month trial period for the PhotoStamps project.

The company said it may suspend the service while the data are evaluated.

Earlier this month, Stamps.com President and Chief Executive Ken McBride said he was confident the U.S. Postal Service would approve PhotoStamps as a permanent fixture following similar trials the company has undertaken with its other products.

Gerry McKiernan, spokesman for the U.S. Postal Service, told the Chicago Sun-Times Wednesday that the service "won't be available after Sept. 30. That's when the evaluation begins. We can't say when, or if, it will be available again."

As of Sept. 2, Stamps.com said customers ordered 40,000 sheets, or 800,000 individual PhotoStamps, since the venture started. The stamps cost about twice what the U.S. Postal Service charges.

In a Wall Street Journal article earlier this month, which discussed the use of nefarious images on the personalized stamps, CEO McBride noted that 40 percent of the 40,000 stamps ordered have pictures of babies, with pets making up 15 percent.

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