Green Dot Bank, the subsidiary bank of
Green Dot Corporation
), recently announced that it has entered into a definitive
agreement with GE Money Bank, a subsidiary of
General Electric Company
), to acquire reloadable prepaid cards bearing the marks of
Wal-Mart Stores Inc
FIDELITY NAT IN (FIS): Free Stock Analysis
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Shares of Green Dot jumped 10.07%, following the news of the
acquisition to close near its day's high of $19.36, also crossing
its 3-month average traded volume.
Per the agreement, GE Bank will transfer all the deposits
underlying the prepaid card at face value to Green Dot Bank and
the latter will in turn assume certain liabilities of GE Bank,
including its obligation to Walmart under a previously amended
and restated prepaid card program agreement dated May 27, 2010.
The deal is expected to be complete by the second half of 2013,
subject to regulatory approvals.
As the stock prices soared 10% with the news, investors also
appear to be optimistic about Green Dot's association with the
Walmart brand as it might boost its revenue, going forward.
Industry experts believe that the replacement of GE Bank by Green
Dot Bank as the issuing bank for Wal-Mart prepaid card is
modestly positive for Green Dot and have maintained their
previous rating, citing competitive and valuation concerns.
Based in CA, Green Dot provides low-cost banking and payment
solutions. Its main objective is to reinvent personal banking for
the masses through a portfolio of financial services available
across a wide array of retail locations nationwide.
Green Dot currently carries a Zacks Rank #2 (Buy). Another stock
within the industry worth a look include
Fidelity National Information Services, Inc.
), which carries a Zacks Rank #2(Buy).