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Prepaid-program manager Green Dot Corp. will launch a marketing campaign with talk-show host and comedian Ellen DeGeneres.
DeGeneres’s celebrity will be used to promote Green Dot Bank, Steve Streit, Green Dot founder and chief executive, said during a conference call with analysts Thursday. DeGeneres is host of the popular TV program “The Ellen Show.”
Whether DeGeneres’s appeal will be enough to boost Green Dot’s performance will be seen, but Streit is optimistic. “Green Dot Bank and the Unlimited Cash Back Bank Account will be integrated into the Ellen show on TV and through her social-media content in a variety of ways with a goal of millions of Americans learning about the extreme value of Green Dot Banks, New Unlimited Cash Back Bank Account, and then hopefully going online to open an account for themselves,” Streit said, according to a SeekingAlpha.com transcript.
Any boost may be welcomed by investors. In early trading Friday, Green Dot’s stock, at $23.75, was down 21% from Thursday’s close of $30.04. The drop follows third-quarter results that showed a loss despite a slight increase in revenue.
Earlier this year, investors reacted negatively when the prepaid specialist announced a $60 million plan to reach into new markets for banking services. And the stock has yet to recover from the company’s previous quarterly earnings report that sent its shares tumbling from $47.26 to $27.42 from August 7 to 8.
In its third-quarter results, Green Dot reported $240.4 million in revenue, a 1.7% increase from $236.3 million last year. It posted a $531,000 loss compared to a $4.6 million profit a year ago.
Green Dot said it had 5.2 million active accounts at the end of the third quarter, down from 5.7 million in the second quarter, and down from 5.4 million a year ago.
In a research note, analyst Robert Napoli with William Blair & Co. LLC characterized Green Dot’s position as one that indicates weakened consumer performance. But he added that Green Dot has a healthy platform and anticipates further investment in 2020. The company’s Unlimited banking product also is encouraging, he says.
Napoli cautioned that Green Dot likened the competitive environment now to the one in 2011 to 2014, when the prepaid business had lots of competition that eventually exited. “Green Dot has a more diversified business today, but we remind investors earnings were essentially flat during those years,” Napoli wrote.
One big positive for Green Dot came In October, when Walmart Inc. extended by seven years its agreement with the company. Under the pact, Green Dot serves as issuing bank for and manager of the Walmart MoneyCard program.
