Author Topic: Class action lawsuit  (Read 37887 times)

Roy S

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Re: Class action lawsuit
« Reply #30 on: January 12, 2013, 04:02:18 PM »
According to the Jan 9th Prospectus, David Silverman, Jeff Jacobs and Lawrence Cheng are still listed under the "Management" section, which states, "The following table sets forth information about the Company’s executive officers and directors as of the date of this prospectus."  It appears they still need to do a little updating to their Prospectus--yes, I actually do read (or rather skim through) the Prospectus from time to time.

I think a bigger issue (than who has resigned) is the cash flow issue at Prosper.  Unless they secure another round of financing (to add to the over $70 million so far), Prosper won't have enough cash to continue operations regardless of the lawsuit outcome.  According to the last 10Q, the Prosper burned through $4 million in three months; and they only had about $4 million cash on hand at the end of September.  That is a more important issue at the moment.

DanB

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Re: Class action lawsuit
« Reply #31 on: January 12, 2013, 05:10:02 PM »
Roy S..............One would not be going far out on a limb to suggest that the next round of financing is all but secured & that the announcement of such may be imminent.

TRPeterson

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Re: Class action lawsuit
« Reply #32 on: January 16, 2013, 09:36:25 AM »
Roy S..............One would not be going far out on a limb to suggest that the next round of financing is all but secured & that the announcement of such may be imminent.

DanB,
While I'm very hopeful what you say is true (I'm 99% in Prosper and 1% in LC), just curious if there's any public news backing your financing prediction.  We tend to learn so much more inside news on this forum... then Prosper tells us via email weeks later.
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NoGoodDeed

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Re: Class action lawsuit
« Reply #33 on: January 17, 2013, 10:40:51 AM »
I will be covering this news on the blog probably next week.

(Fast-forward a week.)
Or maybe the week after that, I gather?  This news would be a month old by then.

Maybe it's just me, but the upbeat P2P lending news appears to reach the LendAcademy community more quickly than this.

But back to the lawsuit, a few more setbacks:
Quote
ORDER DENYING MOTION FOR SUMMARY ADJUDICATION AND GRANTING AND DENYING REQUESTS FOR JUDICIAL NOTICE AND DENYING PLAINTIFFS' MOTION TO STRIKE SEPARATE STATEMENT AND DENYING APPLICATION TO SEAL
Disclaimer: Peter announced that I'm from a group with a vested interest in seeing Prosper fail. 
Also, Peter makes money referring people to Prosper.

berniemadeoff

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Re: Class action lawsuit
« Reply #34 on: January 17, 2013, 11:07:09 AM »
NoGoodDeed - you seem to be very plugged-in to the drama around Prosper.  What do you think is the most likely outcome for the company?  Does it survive or does it go under this year?

NoGoodDeed

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Re: Class action lawsuit
« Reply #35 on: January 17, 2013, 12:58:36 PM »
My opinion is rather meaningless.  But since you flatter me with the question, I'll throw a lengthy reply at you...

1) The trajectory of the lawsuit over the past 4+ years in the plaintiff's favor is unlikely to change.  (Peter appears to have confidential sources.  But I ask you, if a source keeps himself confidential, does that then make him more reliable??)  Prosper will be forced to settle.  It'll be painful.  Will it kill Prosper?  I don't know.  The lawsuit has been successful holding the key (deep-pocketed) individuals responsible, and I don't know who will be made to pay what.  ira01 seems in a position to have more insight here, maybe.

2) Funded Prosper listings have taken a recent downturn. http://www.lendacademy.com/forum/index.php?topic=608.0

3) Employee turnover at the company seems awfully high (and fwiw, nobody from Prosper has been participating in this forum for quite some time now).

4) Cash: Prosper's cash burn rate has GOT to be a huge concern.  And although they had an insurance policy to protect (somewhat?) against lawsuits, it's been fully paid and I think Prosper used up much of that money to launch a promotion, IIRC.   Meanwhile, I don't know when VC monies will dry up.  There may or may not be another round or two.  But there'll need to come a point soon where Prosper will need to present something brand new - if not completely re-invent itself - if they are to keep VCs supplied with hopium.

For recent Prosper lenders, meanwhile, they're doing fine ROI-wise.  But looking at these issues Prosper execs are facing there at Sutter Street, we see the company is basically on life support.

Is Prosper likely to go under this year?  Historically, the VC's willingness to continue to throw money at Prosper always has me befuddled.  So I don't feel comfortable giving a definite "yes".  But perhaps the answer will prove to be more complicated than "yes" or "no".  Rather, we may find that Prosper still exists 2 or 3 years from now, but in a form that has little resemblance to what it is today.

The next question, I suppose, is: should Prosper lenders worry?  I'm not sure that they do.  The concern that borrower's repayments would go to creditors (instead of lenders) should Prosper declare bankruptcy seems to have been recently addressed with their new remote bankruptcy vehicle, Prosper Funding, LLC.   There remain older concerns, however.  Off the top of my head: 1) Little transparency on the collections front, and Prosper not filing any claim if a borrower declares bankruptcy and 2) the lender agreements commit lenders to any modifications of the agreement whether the lenders sign the modded agreements or not.  As of this writing, a lender seems to be preparing to take the issue of Prosper's lack of performing its fiduciary duties to Small Claims court.
Disclaimer: Peter announced that I'm from a group with a vested interest in seeing Prosper fail. 
Also, Peter makes money referring people to Prosper.

berniemadeoff

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Re: Class action lawsuit
« Reply #36 on: January 17, 2013, 02:40:27 PM »
Thanks for the lengthy response.  I not as bearish as you, but it is good to understand the risks.

Peter

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Re: Class action lawsuit
« Reply #37 on: January 17, 2013, 06:00:40 PM »
NoGoodDeed,

Thanks for your detailed opinion. As to your first question, I intend to be covering this story next week, I am still waiting for a couple more pieces of information and I will be publish an article on the blog.

Once again I am not going to comment on the lawsuit other than this. My understanding is that the judge has deferred making a final decision in the case at this time.

I continue to believe that Prosper will not only survive this year, but they will have a great year.

Let me also explain why I am bullish on Prosper's long term prospects regardless of the lawsuit. Lending Club has shown that this industry has tremendous potential. It is highly likely that within five years the industry will be issuing multiple billions of dollars in loans every MONTH. Within ten years it could easily be tens of billions of dollars a month. Prosper is the clearly entrenched number two player in this market. I believe this is why their investors are patient and keep pouring money in. They have known about the lawsuit for four years and yet they continue to invest. I believe this is because they see a long run play where a new multi-billion dollar industry is being born and they want to be a part of it.

And for the record, I have never hidden the fact that I make money from referring people to Prosper as well as Lending Club. I also never pretend to be completely impartial. I am bullish on p2p lending and I want to see a thriving industry. Do I put a positive spin on things? That is my nature so I can certainly be accused of that. But I never try to mislead anybody nor do I withhold information that I think would be important for my readers to know.
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hippo387

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Re: Class action lawsuit
« Reply #38 on: January 17, 2013, 07:37:08 PM »
I think the bottom line for most of us here regarding Prosper is that we don't want to lose our money. Personally, I could care less if Prosper lives or dies as long as my investments continue to be serviced as intended, i.e. people are able to make loan payments and I benefit by earning interest.  In this regard, I take some pleasure in NoGoodDeed's comments today because even (s)he admits that Prosper Funding LLC has probably taken care of the issue. (And, in my opinion, in a worst-case scenario Lending Club wouldn't want the reputation of P2P lending to take a hit so they would have an interest in acquiring Prosper to save the loans and gain the customer base.)

At any rate, I think NoGoodDeed's biggest mistake is to think we care about Prosper beyond its impact on our own money.  The rants don't strike me as being concerned with people's money, they just seem like rants, and I'm not sure why it's worth the time if (s)he doesn't also have something to gain from the conversation.  I think there are a lot of crappy companies out there but I don't go looking for web forums just to point it out to others.  So, in conclusion, I'm inclined to ignore anything NoGoodDeed says unless hearing about what (s)he has to gain from the conversation.
   

TRPeterson

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Re: Class action lawsuit
« Reply #39 on: January 20, 2013, 08:51:27 AM »
I think the bottom line for most of us here regarding Prosper is that we don't want to lose our money. Personally, I could care less if Prosper lives or dies as long as my investments continue to be serviced as intended...

At any rate, I think NoGoodDeed's biggest mistake is to think we care about Prosper beyond its impact on our own money. ...

Apparently you and I think similarly...

I have to find the heavily positive and negative 'emotions' towards a company and it's future rather comical.  I don't attach smiley faces or frowny faces to my George Washingtons.  Right now I make better returns on Prosper than LC, so I will continue to invest with Prosper until which time I think I can do better elsewhere.  If the notes I invest in begin to not get funded on Prosper, hence making a return more difficult, then I will transition over to LC.  Rather black-and-white.

After losing almost every dime I put into Prosper 1.0, I never considered starting a blog to complain about it.  It was my choice to invest, not theirs.  It seems very pointless to waste a minute of time complaining about how someone operated a business if I'm the one that decided I trusted the business plan/product well enough to put money into it.  I'm responsible for where I put that dollar, not them.

I invested heavily in Tesla because I like Elon Musks' business plan and thought the product was solid, not because I was 'happy' or 'emotional' about a hot-looking electric car that the kid in me wants just like a Hummer and a Lambo.  It paid well, I increased my IRA 20% in 2008.  I don't see such rises coming again so right now I'm not invested in Tesla.  I participate in these forum looking for good returns or ideas for good returns, not an emotional outlet.
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NoGoodDeed

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Re: Class action lawsuit
« Reply #40 on: January 23, 2013, 10:36:35 AM »
And for the record, I have never hidden the fact that I make money from referring people to Prosper as well as Lending Club. I also never pretend to be completely impartial. I am bullish on p2p lending and I want to see a thriving industry. Do I put a positive spin on things? That is my nature so I can certainly be accused of that. But I never try to mislead anybody nor do I withhold information that I think would be important for my readers to know.

And that's all fine.  I mean, there's nothing wrong with being a fan of the p2p lending industry nor making money at it.

But it'd be a mistake to not recognize that there's therefore emotional and financial incentive to disparage ANYbody who says ANYthing bearish as being from a group of rabid haters:
... NoGoodDeed and others. They come from the Prospers.org forum and have a hatred of Prosper that is truly quite staggering.

... hence my sig.

Quote
I also never pretend to be completely impartial.

Mostly true.  But without complete impartiality, I'm not seeing how you can then achieve your goal "to be the number one resource for this burgeoning peer-to-peer lending industry."   It may make sense to re-jigger this part of the "About" page so that your readership doesn't take this to mean - despite disclaimers elsewhere on that page - that there's complete impartiality.

So, in conclusion, I'm inclined to ignore anything NoGoodDeed says unless hearing about what (s)he has to gain from the conversation.

ad ho·mi·nem adjective \(ˈ)ad-ˈhä-mə-ˌnem, -nəm\
marked by or being an attack on an opponent's character rather than by an answer to the contentions made


The task of making myself worthy in the eyes of everybody here isn't something I'll embark on as it'd be never-ending and in any case, it wouldn't really change anything.   I leave the onlookers to filter out whatever part of any of my posts they view as irrational - and, should they choose, take note of what's left.
Disclaimer: Peter announced that I'm from a group with a vested interest in seeing Prosper fail. 
Also, Peter makes money referring people to Prosper.

NoGoodDeed

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Re: Class action lawsuit
« Reply #41 on: January 23, 2013, 10:40:12 AM »
Anyway, we will find out more in a couple of weeks.

Fast-forward more than a couple weeks.
What happened that you were referring to?  The funding?
« Last Edit: January 23, 2013, 10:42:48 AM by NoGoodDeed »
Disclaimer: Peter announced that I'm from a group with a vested interest in seeing Prosper fail. 
Also, Peter makes money referring people to Prosper.

hippo387

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Re: Class action lawsuit
« Reply #42 on: January 23, 2013, 01:06:22 PM »
NoGoodDeed -- I wasn't questioning your character, I was questioning your motivation. We all have some motivation to participate in the forum. I made mine very clear -- to make money (and hopefully not lose it!).  Peter's motivations are pretty clear because he transparently writes about them (he promotes the industry, he's an investor, he's optimistic about all of it).  Understanding this helps me evaluate what he's saying.  So that's what I was asking for from you -- where are you coming from? What's your stake in all this? You're clearly passionate about it and I'd like to know why. Are you involved in the lawsuit, are you a burned investor, or are you just a truth-teller with an interest in the industry? Give us some context to help evaluate your information.

When it comes down to it I don't really care about Prosper or Lend Academy's pro-P2P bias or your bias.  You're probably a great guy.  But I just care about my investments in the context of this forum.

berniemadeoff

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Re: Class action lawsuit
« Reply #43 on: January 23, 2013, 02:34:39 PM »
I actually value NoGoodDeeds presence here in the forum.  I always like to hear views contrary to my own, so I hopefully don't get caught with blinders on.

Peter

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Re: Class action lawsuit
« Reply #44 on: January 23, 2013, 03:12:00 PM »
Fast-forward more than a couple weeks.
What happened that you were referring to?  The funding?
I was referring to the court hearing. I was hoping that the judge would make a final ruling on the class action lawsuit in January but that can has been kicked down the road some more.

I am also fine with NoGoodDeed being on this forum because I also welcome views other than my own. You can learn a lot when people disagree with you. Which brings me to another point. If you had spent much time on my blog you would have noticed that there are plenty of people who disagree with me there. Even though I might have a financial incentive for doing so I don't disparage anyone who criticizes LC or Prosper. The only thing I don't tolerate are harsh personal attacks - those get deleted.
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