Author Topic: LendingClub Files S-1 with SEC  (Read 17778 times)

DanB

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Re: LendingClub Files S-1 with SEC
« Reply #15 on: August 28, 2014, 02:05:37 AM »
I might have missed this, but does anyone know how big of LC value is the $500M? 20%?

Well it'd  be 10% if they're hoping to have the company valued at $5 billlion.

Fred93

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Re: LendingClub Files S-1 with SEC
« Reply #16 on: August 28, 2014, 02:42:53 AM »
I might have missed this, but does anyone know how big of LC value is the $500M? 20%?

If, as rumored in the press, they want to value themselves at $5B, then $500M is 10% of that.

rawraw

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Re: LendingClub Files S-1 with SEC
« Reply #17 on: August 28, 2014, 05:43:51 AM »
http://www.bloombergview.com/articles/2014-08-27/lending-club-can-be-a-better-bank-than-the-banks

The Bloomberg article is more witty and eye-opening, IMO.
Great article!  I'm going to share this with some buddies. 

turing

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Re: LendingClub Files S-1 with SEC
« Reply #18 on: August 28, 2014, 10:13:15 AM »
They filed S-1, which puts their IPO around beginning or middle of October.

On average IPO's take take place about 30-45 days from S-1 file date, but can take quite a bit longer in some cases.
http://usequities.nyx.com/ipo-center/recent-ipo

Some at this link took 180 days or more (Catalent or Ryerson).  One even took several years.

cfb

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Re: LendingClub Files S-1 with SEC
« Reply #19 on: August 29, 2014, 03:41:16 PM »
The other part that bears consideration is that this means that many of the things LC has been doing lately (good and bad) are window dressing for an IPO.

Main things I've noticed is being a lot less optimistic about returns and defaults, making more of an effort to collect money from default loans, and raising some fees.

core

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Re: LendingClub Files S-1 with SEC
« Reply #20 on: August 30, 2014, 07:51:46 AM »
A cursory glance at the filing tells me that all of you are slowly getting the shaft.  But you already knew that, right?

What shocks me is how sterile the comments are which do reference this.  Oh, that's right.  You don't have a choice at this party. 

rawraw

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Re: Re: LendingClub Files S-1 with SEC
« Reply #21 on: August 30, 2014, 02:22:16 PM »
A cursory glance at the filing tells me that all of you are slowly getting the shaft.  But you already knew that, right?

What shocks me is how sterile the comments are which do reference this.  Oh, that's right.  You don't have a choice at this party.
What specifically are you talking about?

DanB

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Re: Re: LendingClub Files S-1 with SEC
« Reply #22 on: August 31, 2014, 10:08:44 PM »
A cursory glance at the filing tells me that all of you are slowly getting the shaft.  But you already knew that, right?

What shocks me is how sterile the comments are which do reference this.  Oh, that's right.  You don't have a choice at this party.
What specifically are you talking about?

Well I'm assuming that (among other things) Core is saying that at this venue guests who make inconvenient suggestions or assertions may find themselves marginalized by the cheerleaders, apologists, propaganda experts etc who decide who is censured & who isn't. These attempts at marginalization often paint the messenger as being abrasive or rude in hopes that such accusations obscure negativity, criticism & message content in favor of unbridled positiveness, decorum & half fullness................in a not so transparent admission that it has always been their intent to make this a p2p fan site & not a venue for serious discussion.
« Last Edit: September 01, 2014, 04:04:33 PM by DanB »

core

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Re: LendingClub Files S-1 with SEC
« Reply #23 on: September 01, 2014, 01:52:45 AM »
Tsk tsk, Dan, such abrasiveness.  And with just a month or two to go until the IPO.  You had better get out your pom-poms if you want to be invited to any more yacht parties.  Girls only get tossed on the laps of folks who adhere to "our" code of conduct.  As for the definition of "our", I believe that can be found right above the entry for "several".

(Just as an aside, these "pom poms" I speak of are colorful devices wielded by cheerleaders.  Maybe in queenie English that term means something offensive.  I am not sure. )

Rawraw, as for what I was specifically talking about:  As we can all see, the retail investor is now a very small minority.  This is no surprise -- it has been heading this direction for quite some time.  After the IPO I expect that piece of the pie to shrink even further, but with the blue sky exemption there will be even more demand virtually overnight.  I would not be surprised if the retail investor is forced out altogether less than 2 years after the IPO.  Contrary to what LC management and certain journos may say about LC's so-called commitment to the retail investor.  Don't believe a word of it because it's pure bunk and all they're trying to do is put lipstick on a sloppy pig.

If your retirement plans include Lending Club, you had better be rethinking that.  Not that LC should  make up a substantial portion of your retirement savings anyway:  If LC runs into financial trouble then can/will loose your entire investment, because you have no claims to any portion of the "loans".  I realize most everyone here knows this, but I would not want to miss an opportunity to point it out yet again.

rawraw

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Re: LendingClub Files S-1 with SEC
« Reply #24 on: September 01, 2014, 05:58:01 AM »
I get what you are saying, but not sure if I agree with the conclusion. In many areas of finance retail represents a smaller slice but they still have access. Only time will tell, though.

 The one counter point is that in traditional banking, you have access to unlimited institutional money as deposits often cheaper. The problem is you get no loan demand through it like you do.

I do expect fees will diverge, where institutions get breaks due to volume. But it may already be occurring

DanB

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Re: LendingClub Files S-1 with SEC
« Reply #25 on: September 01, 2014, 06:50:05 AM »
Tsk tsk, Dan, such abrasiveness.  And with just a month or two to go until the IPO.  You had better get out your pom-poms if you want to be invited to any more yacht parties.  Girls only get tossed on the laps of folks who adhere to "our" code of conduct.  As for the definition of "our", I believe that can be found right above the entry for "several".

(Just as an aside, these "pom poms" I speak of are colorful devices wielded by cheerleaders.  Maybe in queenie English that term means something offensive.  I am not sure. )

Rawraw, as for what I was specifically talking about:  As we can all see, the retail investor is now a very small minority.  This is no surprise -- it has been heading this direction for quite some time.  After the IPO I expect that piece of the pie to shrink even further, but with the blue sky exemption there will be even more demand virtually overnight.  I would not be surprised if the retail investor is forced out altogether less than 2 years after the IPO.  Contrary to what LC management and certain journos may say about LC's so-called commitment to the retail investor.  Don't believe a word of it because it's pure bunk and all they're trying to do is put lipstick on a sloppy pig.

If your retirement plans include Lending Club, you had better be rethinking that.  Not that LC should  make up a substantial portion of your retirement savings anyway:  If LC runs into financial trouble then can/will loose your entire investment, because you have no claims to any portion of the "loans".  I realize most everyone here knows this, but I would not want to miss an opportunity to point it out yet again.

A couple of years ago I argued that the chances of retail investors losing their entire investment due to some unexpected macro scenario was very small & would get smaller over time. That worse case scenario argument was based on the assumption that the number of retail investors would get progressively larger & in the not too distant future reach a tipping point where the sheer numbers of affected people would make it politically unpalatable for any government to allow a massive loss.............regardless of the specifics of the way the deal is written. Look at the Icesave rescue for UK & Dutch investors as an example of how a rescue occurred because it wasn't politically acceptable (among other things) for a hundred thousand mom & pop savers to get shafted despite the no guarantee nature of those speculative accounts.

 To exert similar political pressure in this country you'd need perhaps half a million or so retail investors...........a number that we're not likely to get to anytime soon, thus making my initial argument of safety less secure. That is why I've been nagging about a BRV for retail investors. According to Peter that is not going to happen any time soon either.  See here:

http://www.lendacademy.com/lending-club-files-to-go-public/

Now I don't know if retail investors will or won't get pushed out like Core suggests, but if retail investors both as a percentage & as an actual number do not increase in tandem with institututionals then my concerns of safety would increase. Institutional  investors by definition accept high risk & do lose money routinely without much fanfare. Now, pls. understand that I still see the risk as small, but it's there & it's not getting smaller. Of course it would help if LC actually shows that they can make any money for longer than a few months at a time, but that's another conversation.
« Last Edit: September 01, 2014, 12:33:09 PM by DanB »

JoeB

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Re: LendingClub Files S-1 with SEC
« Reply #26 on: September 01, 2014, 07:54:50 AM »
If recent times with less volume and lack of quality is any indication, then the handwriting is on the wall. The August  loan volume and quality was abysmal. Was DTI raised up to 40% to make more loans available for the retail market because higher grade are going elsewhere? Is all this a coincidence? One thing is certain, time will tell the tale.
Best to all,

JB

rawraw

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Re: LendingClub Files S-1 with SEC
« Reply #27 on: September 01, 2014, 09:35:53 AM »
DanB, I do agree that the risk you talk about isn't talked about enough.  Perhaps it's just my natural inclination as I've studied risk management a bit, but the risks are often ignored outside credit risk. And even then, people use the recent performance to infer that's how credit risk will always perform.  I just tell myself that many who are the main stream P2P guys aren't necessarily finance guys, so perhaps they honestly just don't think about it much.  I always try to point out the risks in this forum, but those comments typically go largely ignored.   

These forums and points of view of posters are extremely valuable in many areas, it just seems risk management is not one of them. The problem with risk is people are only concerned about it when they can observe it.  And if you can observe the risk, it is really too late to mitigate it.  So people will just respond "Well it hasn't happened yet DanB, who cares?"  Or at least, that's been my impression of these forums.  But this is a human problem, as this lack of focus on risk and being lulled into complacency exists all over in several areas.  And continually gets repeated in finance as well

If I ruled the universe, I'd be discussing underwriting changes, product expansions, and all these other things that increase the risk to viability of LC as a whole.  I agree that I think it's low, but with growth like LC it doesn't take long to assume a massive risky position.    I think LC has been managed well so far, but it doesn't mean we stop paying attention.
« Last Edit: September 01, 2014, 09:38:10 AM by rawraw »

DanB

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Re: LendingClub Files S-1 with SEC
« Reply #28 on: September 03, 2014, 05:56:05 AM »
Rawraw.........I don't necessarily disagree with your analysis.  However it may surprise you to know that I too have virtually no background in risk management, banking or finance either. Many years ago I did spend 8 months at Merrill, but half that time was spent passing the Series 7 & the latter half spent realizing how much a stockbroker was really a stock "salesman" in reality. Then I quit & that was that. So I'm not sure if my personal story backs up your macro profile. But I will agree with you that there is a "human" problem, as you stated & an internet problem as well.

Although few will argue that the internet places incredible amounts of useful information at our fingertips, it is also no secret that the net has done a stellar job grouping like minded individuals in increasingly intransigent homogeneous pockets of thought. Evidence of this is plentiful in the news media................but you see it here as well.

Just like in the news media, here, the initial "tone" is set by the people who run the place, by the choices of what is covered & the manner in which that coverage is painted, presented etc. Here on this blog p2p coverage has always been overwhelmingly positive. This is completely understandable given the nature of this site & it's quite natural for p2p lovers to gravitate here, just like Prosper haters have gravitated to prospers.org (where no one ever says anything positive about Prosper) To be clear, I'm not suggesting that some cult like fanatical love for p2p exists here, but this site is far from "balanced"................& this is precisely the reason I believe you get very little discussion of the type of risks that you've brought up on a few occasions. Most people here love the idea of p2p & it tends to push other things out of mind or at least out of discussion.

 I think it was almost 4 years ago on the main blog area where I was involved in a back & forth exchange about risk or inflated rates of return, I don't remember precisely. But the one thing I clearly remember was a seemingly frustrated response from Peter which amounted to nothing less than..............why are you here as a p2p investor when you have so many criticisms of p2p? I'm not going to subject readers to another page long response to that outrageous comment ( as if one waves the right to question or criticize when one invests in an item)...............but that right there is a prime example what I mean by the tone of this blog. Though 4 years have passed, this tone, this lack of balance, this lack of a consistent & full throated opposition unencumbered by one man's understanding of "civilized discourse" is what was missing here then & now.

Why the little discussion of certain macro risks, why the lulled into complacency you brought up. Why the muted reactions that Core asks about? Or the seemingly shrugs of the shoulder ?

http://www.lendacademy.com/forum/index.php?topic=2623.0

Well I believe it can all be traced back to the tone set by management here. People hang around with like minded individuals. Most individuals who could provide balance don't stick around here for long. They make 1 or 2 hastily thought out negative comments & then just perhaps think screw it & move on.

Just like in politics or global affairs strong opposition isn't pretty & it's often not polite, but it is necessary if minds, assumptions, conclusions are to be continuously challenged. Progress & greater understanding is rarely achieved when everyone thinks the same way or shares the same view. The uber supporters of p2p never miss a chance to remind us all that p2p is this great destabilizing challenge to the damaged or antiquated banking system & maybe they're onto something. But these same supporters, the ones who call for destabilization are often the ones who have the "love it or leave it" mentality when anyone challenges & destabilizes aspects of p2p itself. I'm sorry but I see something fundamentally not quite right in that. 

Prescott

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Re: LendingClub Files S-1 with SEC
« Reply #29 on: September 03, 2014, 01:46:36 PM »
...
Look at the Icesave rescue for UK & Dutch investors as an example of how a rescue occurred because it wasn't politically acceptable (among other things) for a hundred thousand mom & pop savers to get shafted despite the no guarantee nature of those speculative accounts.

To exert similar political pressure in this country you'd need perhaps half a million or so retail investors...........a number that we're not likely to get to anytime soon, thus making my initial argument of safety less secure. That is why I've been nagging about a BRV for retail investors. According to Peter that is not going to happen any time soon either.  See here:

http://www.lendacademy.com/lending-club-files-to-go-public/

Now I don't know if retail investors will or won't get pushed out like Core suggests, but if retail investors both as a percentage & as an actual number do not increase in tandem with institututionals then my concerns of safety would increase. Institutional  investors by definition accept high risk & do lose money routinely without much fanfare. Now, pls. understand that I still see the risk as small, but it's there & it's not getting smaller. Of course it would help if LC actually shows that they can make any money for longer than a few months at a time, but that's another conversation.

I hope no political pressure gets put on them, if they fail, they should fail. There are considerable protections put in place at Prosper (less so at LC) - all loans are held in a bankruptcy remote vehicle, should anything happen to the parent company. LC is less protected for retail investors (last I checked).

I couldn't find your arguments regarding more retail = more safety, but I hope it wasn't just in "political pressure" - the numbers are probably too low for any real political pressure fixes, and I get tired of bailing out people who make unsound decisions. I think that more institutional dollars = more safety. They put far more pressure on the platforms to get accounting right, far more pressure to ensure that they don't f up their credit models, and that the platforms are taking an iterative approach to changes. At this point the credit models for consumer lending are pretty baked, and they are tweaking and refining to better target and expand their originations. Institutional has more incentive and better ability to make sure i's are dotted and t's are crossed than retail will. As long as everyone is losing money together, that should be legit.

Prosper and LC are trying to rebrand as market place lending because the "peer-ness" is largely marketing at this point. >90% of the dollars at prosper are institutional. As long as retail can invest their dollars, I don't see this as a huge problem. Those people with heavy filters, might not, but that's their choice - I think being able to invest as an index across a couple of grades is sufficient to say that it's working for retail. I think it'll always be good PR, word of mouth, branding to keep a retail channel open.

Of course it would help if LC actually shows that they can make any money for longer than a few months at a time, but that's another conversation.

LC not making money is fine - lots of companies do it, see Amazon; need to pay attention to why. I think LC is in good shape in this regards. Prosper is also profitable, but it behooves them to reinvest it all and a little extra (to not make a profit) to continue to build their business (and you know, maybe fix it so their accounting works right)