Author Topic: You have to love Wall Street  (Read 7715 times)

Half Right

  • Jr. Member
  • **
  • Posts: 89
    • View Profile
    • Email
You have to love Wall Street
« on: June 07, 2016, 08:09:43 PM »

Reuters: Former LendingClub CEO Laplanche looking to take company private
Jun 7 2016, 18:42 ET | About: LendingClub... (LC) | By: Eric Jhonsa, SA Eye on Tech, SA News Editor [Contact this editor with comments or a news tip]

Reuters reports Renaud Laplanche, who last month stepped down as LendingClub's (NYSE:LC) CEO due to the circumstances surrounding a loan sale, is talking to P-E firms and banks about financing a takeover of the company.

Shares are up 5.5% after hours to $4.63. They fell 7.4% in regular trading amid news LendingClub had postponed its annual meeting and #2 shareholder Baillie Gifford had liquidated its stake.

jz451

  • Full Member
  • ***
  • Posts: 115
    • View Profile
Re: You have to love Wall Street
« Reply #1 on: June 07, 2016, 08:42:02 PM »
To be fair it is probably a better move to take the company private than keep it as a public company. The IPO was essentially a cash grab and now it would make strategic sense if Lending Club remained private for a while until they can maintain a higher level of loan buying  from institutional investors and significantly increase the pool of retail investors.

GS

  • Sr. Member
  • ****
  • Posts: 413
    • View Profile
Re: You have to love Wall Street
« Reply #2 on: June 07, 2016, 08:45:22 PM »
I liked the company private, too.  But damn, sell the company at 15  a share and buy it back for about 5 a share.  What a screw job for investors who held on to the thier IPO shares.

Rob L

  • Hero Member
  • *****
  • Posts: 2017
    • View Profile
Re: You have to love Wall Street
« Reply #3 on: June 07, 2016, 10:38:33 PM »
I liked the company private, too.  But damn, sell the company at 15  a share and buy it back for about 5 a share.  What a screw job for investors who held on to the thier IPO shares.

I'd be surprised if RL could pull it off but if someone wanted to take LC private it might be doable. The company has new owners now. Something like 80% of it's entire stock traded the week of 5/9 and I wouldn't be surprised if more than half the owners are in at $5 a share or less. Huge numbers of shares traded below $4.50. So someone comes in at $7.50 to take the company private how do you vote? I'm not saying the company's worth $7.50 at all but who knows? Sprinkle on the possibility that the acquiring party(s) could also be banks or institutions that solve LC's loan funding shortfall and the potential Madden problem then stranger things have happened I suppose. I don't know much about this stuff; just a bit of wild speculation. Would certainly expect major problems and lawsuits from former shareholders. The SEC's already investigating. That might be enough to kill it. Anyway, could be interesting. "Blue Horse Shoe Loves Anacot Steel".

Had to add one more thing. LC still has almost exactly the same cash in the bank that they raised by their IPO. The company could lose one heck of  big shareholder lawsuit and not be that much worse off than before they went public (moneywise at least). The buyer would just have to be a true believer in the future of the company and/or it's business model.
« Last Edit: June 07, 2016, 10:57:51 PM by Rob L »

P2PFact

  • Jr. Member
  • **
  • Posts: 91
    • View Profile
Re: You have to love Wall Street
« Reply #4 on: June 07, 2016, 11:02:17 PM »
I hope he didn't pull it off. Usually PE buy out comes with leverage by issuing new debt. Those deb will certainly be more senior to retail note holders.

bobeubanks

  • Sr. Member
  • ****
  • Posts: 273
    • View Profile
Re: You have to love Wall Street
« Reply #5 on: June 07, 2016, 11:05:43 PM »
<Snarky comment>

Does RL think fraud is OK in a private company?

</Snarky comment>

I'm thinking going private, esp. if RL is involved, makes the pending shareholder lawsuits stronger in front of a jury.

jz451

  • Full Member
  • ***
  • Posts: 115
    • View Profile
Re: You have to love Wall Street
« Reply #6 on: June 07, 2016, 11:08:36 PM »
This hasn't even happened yet. And if a party were to buy it out, it would likely be done in cash like if I were to buy a sports team.

I hope he didn't pull it off. Usually PE buy out comes with leverage by issuing new debt. Those deb will certainly be more senior to retail note holders.

jheizer

  • Sr. Member
  • ****
  • Posts: 471
    • View Profile
    • LC Tools
Re: You have to love Wall Street
« Reply #7 on: June 07, 2016, 11:12:14 PM »
RL comes back I'm out.
Replacement to P2P Quant's Percentile Tool http://lc.geekminute.com

mchu168

  • Full Member
  • ***
  • Posts: 147
  • “Integrity is the ability to stand by an idea.”
    • View Profile
    • Email
Re: You have to love Wall Street
« Reply #8 on: June 07, 2016, 11:55:09 PM »
Putting the guy who was lax on compliance back in charge of this business would be a big mistake.  Isn't this obvious?  :-\

Fred93

  • Hero Member
  • *****
  • Posts: 2108
    • View Profile
Re: You have to love Wall Street
« Reply #9 on: June 08, 2016, 12:24:28 AM »
I hope he didn't pull it off. Usually PE buy out comes with leverage by issuing new debt. Those deb will certainly be more senior to retail note holders.

Nope.  Can't happen.  Our prospectus promises us that there the company will not take on indebtedness that is senior to ours. 

Fred93

  • Hero Member
  • *****
  • Posts: 2108
    • View Profile
Re: You have to love Wall Street
« Reply #10 on: June 08, 2016, 01:11:47 AM »
Putting the guy who was lax on compliance back in charge of this business would be a big mistake.  Isn't this obvious?  :-\

The board did not accuse him of being "lax on compliance". 

mchu168

  • Full Member
  • ***
  • Posts: 147
  • “Integrity is the ability to stand by an idea.”
    • View Profile
    • Email
Re: You have to love Wall Street
« Reply #11 on: June 08, 2016, 01:16:02 AM »
Putting the guy who was lax on compliance back in charge of this business would be a big mistake.  Isn't this obvious?  :-\

The board did not accuse him of being "lax on compliance".

Well I did.

P2PFact

  • Jr. Member
  • **
  • Posts: 91
    • View Profile
Re: You have to love Wall Street
« Reply #12 on: June 08, 2016, 08:10:58 PM »
Nope.  Can't happen.  Our prospectus promises us that there the company will not take on indebtedness that is senior to ours.

Where in the prospectus?? You mean they $100mm+ bank credit line they have is not senior to the note? Anyway even if it's equal seniority, it's bad for the note holders.

Fred93

  • Hero Member
  • *****
  • Posts: 2108
    • View Profile
Re: You have to love Wall Street
« Reply #13 on: June 08, 2016, 09:41:17 PM »
Nope.  Can't happen.  Our prospectus promises us that there the company will not take on indebtedness that is senior to ours.

Where in the prospectus?? You mean they $100mm+ bank credit line they have is not senior to the note? Anyway even if it's equal seniority, it's bad for the note holders.

Go to the bottom of LC's main page.  Click on "prospectus".  Select the main 2014 prospectus from the list.  Look at page 5.
Quote
The Notes will not be contractually senior or contractually subordinated to any other indebtedness of Lending Club.

Later there's a section that goes into more detail.

nonattender

  • Hero Member
  • *****
  • Posts: 713
  • I am not here.
    • View Profile
Re: You have to love Wall Street
« Reply #14 on: June 09, 2016, 11:28:00 AM »
The Notes will not be contractually senior or contractually subordinated to any other indebtedness of Lending Club.

Now, see, if you were a law-creature, you'd have bolded the two instances of the word "contractually" as being operative, in this context.

I think you might either be reading what you want to see or maybe not reading this enough like an engineer.  Parse it and it looks like, if they don't explicitly say anything in the contracts about seniority/subordination (and just let it linger), they can do whatever they want...

Even if your interpretation were ultimately to be ruled 'correct', then, the only constraint they're under is taking out debt EQUAL to notes.

That's cold comfort.

« Last Edit: June 09, 2016, 11:30:46 AM by nonattender »
A little nonsense now and then is relished by the wisest men.