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Lending Club Discussion => General Lending Club Discussion => Topic started by: Rob L on February 10, 2018, 10:23:11 AM

Title: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 10, 2018, 10:23:11 AM
LC announced that it will report earnings for the fourth quarter of 2017 on Tuesday, February 20, 2018, after market hours.

http://ir.lendingclub.com/file.aspx?IID=4213397&FID=392114610 (http://ir.lendingclub.com/file.aspx?IID=4213397&FID=392114610)

IIRC, it had been speculated the announcement would be on 2/13 not 2/20. Could be this initial guess was simply wrong, LC delayed a week to give the stock market some time to calm down, or ...
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on February 10, 2018, 01:46:41 PM
I just hope it's good, or not too bad. Given their recent price drop I took the opportunity to purchase some more stock. Would be nice to catch a spike or a bounce. $1 or $2 would be real nice.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 21, 2018, 09:22:27 AM
The results were announced yesterday afternoon:

http://ir.lendingclub.com/Cache/1500107799.PDF?Y=&O=PDF&D=&fid=1500107799&T=&iid=4213397 (http://ir.lendingclub.com/Cache/1500107799.PDF?Y=&O=PDF&D=&fid=1500107799&T=&iid=4213397)

In pre-market trading the stock is down from $4.13 yesterday close to $3.68 (about 12%) in pre-market trading.

I haven't read the document or the filing as yet, however self-managed accounts are down from $249mm to $230mm quarter over quarter and $263mm to $230mm year over year.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 21, 2018, 07:07:14 PM
Closed at $3.90 per share today. Back where it's been more or less the past couple of months.
Management is talking up building a more efficient company. Good idea.
IMO they need to become the low cost provider (ruthlessly).
They don't seem to have aggressively moved towards that goal as of yet but at least they're talking about it FWIW.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on February 21, 2018, 08:46:49 PM
Closed at $3.90 per share today. Back where it's been more or less the past couple of months.

Yeah- after the initial big drop the stock price recovered nicely. If I wasn't interested in purchasing more of another one of my stocks that is also battered at the moment I would have dropped another chunk of change on LC stock at the discounted price. Would have been a nice swing to catch.

I found the quarter over quarter and year over year numbers interesting- thanks for pointing those out. Hadn't picked that out of the earnings. I'm into the dregs of my accounts now- my personal account has around $1k left in it, and my IRA around $14k. Having to work a bit harder to sell the remainders- I wonder how much of their quarter over quarter and year over year numbers dropping is due to people leaving given the defaults, tax treatment, etc. Would be nice if they had some sort of churn numbers similar to the telecom companies.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 22, 2018, 09:07:13 AM
It's interesting that Scott Sanborn sold 45,400 shares on 2/12/2018 at $3.75 per share. He received 89,031 shares that same day from the company at $0 cost, so he sold about half of them and raised $170,250. He still owns 1,168,516 shares after the transaction.

I'm pretty sure this is the first time an insider has sold shares under the $4.00 per share mark.

https://www.sec.gov/Archives/edgar/data/1397362/000112760218006152/xslF345X03/form4.xml (https://www.sec.gov/Archives/edgar/data/1397362/000112760218006152/xslF345X03/form4.xml)
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 23, 2018, 01:36:03 PM
As of 1:30pm today is going very poorly for LC stock. Down from yesterday's close of $3.75 it's off -$0.35 to $3.40 (-9.3%).
The 52 week low is $3.29 on 12/07/17. The July 2016 scandal low was $3.44.
Volume is reasonably heavy, but not extreme. 9.6M shares traded, 7.7M shares on an average day.
There's nothing new in EDGAR, so who knows why ... perhaps more post-earnings selling.

Edit:
Yes, there is a new EDGAR document submitted yesterday.
https://www.sec.gov/Archives/edgar/data/1409970/000140997018000240/form8-kaasfiledon22218inte.htm (https://www.sec.gov/Archives/edgar/data/1409970/000140997018000240/form8-kaasfiledon22218inte.htm)

From the Edgar submission:

"EXPLANATORY NOTE

LendingClub Corporation is filing this Amendment No. 1 to Current Report on Form 8-K to amend the Current Report on Form 8-K filed by LendingClub Corporation on February 22, 2018 (the "Original 8-K") for the sole purpose of correcting: (i) a typographical error in the introductory paragraph under Item 8.01 of the Original 8-K and (ii) a typographical error with respect to the interest rate for loan grade A1 in the first table under Item 8.01 of the Original 8-K. As corrected, under the updated interest rates, the interest rate for loan grade D1 has increased 0.38% and the interest rate for loan grade A1 is 5.31%. All other information in the Original 8-K is unchanged."

Also:

"Item 8.01
 
Other Events.

Effective February 20, 2018, interest rates on the LendingClub Corporation ("LendingClub") platform have been updated. Notable changes include an increase of 0.38% for loan grade D1, 0.39% for loan grades D2-D4, 0.40% for loan grade D5, and 0.47% for loan grade E5.

In addition, LendingClub's Chief Investment Officer released his quarterly update, which can be accessed on LendingClub's blog at blog.lendingclub.com. The contents of this blog are not incorporated into this filing"

Maybe there's something there?

Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on February 23, 2018, 07:31:41 PM
I read it- nothing of interest.  ;D
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on February 23, 2018, 07:32:56 PM
As a side note- if this is like the earnings call was, give the stock a few days and it'll be back to where it was before. Just wish I had money available to buy while it's low...

I do see why it may have dropped- looking at my brokerage account LC was cut from Buy to Neutral by Guggenheim- I'll bet that did it.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 24, 2018, 11:02:15 AM
It appears LC director John Mack also believes the stock will rise. He bought 50,000 shares on the open market on 2/22/2018 at an average price of $3.83 per share. After the purchase he owns 1,563,673 shares. He also received 35,336 restricted shares at no cost as compensation for his membership on the Board.

https://www.sec.gov/Archives/edgar/data/1272147/000112760218008087/xslF345X03/form4.xml (https://www.sec.gov/Archives/edgar/data/1272147/000112760218008087/xslF345X03/form4.xml)

They say insiders sell for a lot of reasons but the only reason they buy on the open market is because they believe the stock is going up. Guess we'll see.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on February 26, 2018, 06:37:23 PM
At the moment there seem to be no buyers of LC stock; only sellers. A new all time low of $3.25 was hit before the close at $3.27. In my experience stock price often moves before the reason is known (if ever). IIRC Q4 originations were lower than Q3. Not an encouraging sign. And with interest rates seemingly headed up, LC has to compete with conventional debt instruments in addition to Marcus and its followers. What can LC do to put a positive spin on its prospects here?
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on March 03, 2018, 09:38:29 AM
The past two days have seen LC's stock rocket back up to $3.80 per share. This while the overall market was down. Volume was reasonably heavy but nothing like what we've seen before. On 2/27 there were 9 filings by corporate officers on EDGAR. Per schedule they all became fully vested in various numbers of shares per their compensation agreements with LC. Everyone held all of the stock received with the exception of a percentage they were presumably required to sell for tax withholding purposes. Maybe these filings were the spark that set off the buying spree.

https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001409970&type=4&dateb=&owner=only&count=40 (https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001409970&type=4&dateb=&owner=only&count=40)

I dunno; the EDGAR timing was probably coincidental and meaningless. Could just be trader(s) sold short (2/23-2/28), drove the price way down to shake out the weak hands and trigger stop loss orders, then covered their shorts 3/1 causing the big rally back to exactly where it was 2/23. Wouldn't be the first time and 3/1 had all the look and feel of a short covering rally. The Dow was down around 400 points that day.
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on March 03, 2018, 03:03:30 PM
I was thinking similar about short covering. I managed to buy in at $3.15 and $3.20, so I'm happy. At the current level I'm up about $2k on my position and I am looking forward to at least another $1-2 rise. If the share price gets anywhere close to $6 I'll be ecstatic.

And it's really funny to say I'd be happy about $6 share price when the IPO was for $15 or more. 

Back to trying to get the last of my notes to sell...
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: apc3161 on March 08, 2018, 09:58:26 AM
I was thinking similar about short covering. I managed to buy in at $3.15 and $3.20, so I'm happy. At the current level I'm up about $2k on my position and I am looking forward to at least another $1-2 rise. If the share price gets anywhere close to $6 I'll be ecstatic.

And it's really funny to say I'd be happy about $6 share price when the IPO was for $15 or more. 

Back to trying to get the last of my notes to sell...

Can you explain in very simple terms why you think the stock is a good investment if the underlying product they sell is bad (as evidenced by the fact that you are selling all of your notes...)?
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: dr.everett on March 08, 2018, 07:52:40 PM
Sure- from what I've seen the last few quarters, LC stock behaves in a cyclical fashion, meaning it goes up $2-3 a share, and then back down when earnings come out and they are not as expected. With a bit of watching, proper timed sales, and continued up/down action, I can make a decent return on that movement. So even though I've moved on from the notes themselves, the stock seems to be a good play.

I've done this once before with another much smaller stock- in the end I made about $100K through three well timed sales. Twice when there was a rumor afoot that they were going to be sold, stock went way up, I sold at the top, then didn't sell and the stock cratered, I bought back in, happened a second time 6 months later, I caught it and the same thing happened, and then finally sold at the end of the year. I benefitted each time to the tune of about $30-45K.

I'm thinking something similar might happen with LC- I don't want to miss it if it does. :)
Title: Re: LC Fourth Quarter 2017 Earnings Release and Conference Call Tuesday 2/20
Post by: Rob L on April 09, 2018, 05:31:39 PM
Well, the action way back on 3/1 and 3/2 was not a short covering rally.
Mr. Chen bought himself another 12,501,254 shares at prices between $3.14 and $3.80 over those two days.
He now owns 97,814,405 shares of 408,995,947 total outstanding (per the LC annual report for FY ending 12/31/2017).
That's now roughly 24% of the company. Blue Horseshoe loves LC :)

https://www.sec.gov/Archives/edgar/data/1318400/000131840018000003/xslF345X03/primary_doc.xml (https://www.sec.gov/Archives/edgar/data/1318400/000131840018000003/xslF345X03/primary_doc.xml)

The filing date was 3/5/2018 so that's how I missed this in the first place. Dumb luck I stumbled over the filing this afternoon.
Somehow I thought the report must be filed within 2 days so I guess I thought wrong.

Meanwhile LC stock has been in a rather steady decline after the rally to $4 on 3/12 and is now at $3.34.
Today 4/9 was the largest volume day since the 3/1-3/2 buying spree rally. Roughly 10M shares today. Average daily volume has been around 4M shares.
There is a fair amount of short interest but not extreme (29M shares) or about 7% of the float, but of course this info is rather dated.