Author Topic: Lending Club Stock Price Speculation Dates/Info  (Read 10558 times)

rawraw

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #15 on: December 19, 2014, 07:47:00 AM »
I am considering an option position to hedge my LC lending investment. I figure the stock will crash if loans begin to default in high enough numbers.
Defaults don't really impact LC's income directly.  The stock will largely be driven on volume of originations, not credit quality.  But defaults do indirectly impact that if it materially impacts investor demand, bottle necking the amount that can be originated.

VirginiaBob

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #16 on: December 19, 2014, 09:18:54 AM »
 I think right now the stock price is not really based on the revenue, growth potential, or profits.  It is frenzy.  But I'm not against profiting off of that.

VirginiaBob

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #17 on: December 19, 2014, 09:38:08 AM »
Getting really close to my stop loss trigger $26, wow!  pretty volatile this morning.  The low was $26.25 so far today.
« Last Edit: December 19, 2014, 09:42:29 AM by VirginiaBob »

VirginiaBob

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #18 on: December 19, 2014, 09:46:55 AM »
Sold at $25.95.  $6,479.39 after trading costs.  Not bad for $3,750 worth of investments and in only 6 trading days.  Not buying back in, but it was a fun ride while it lasted.  Back to indexing!

Unfolder

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #19 on: December 19, 2014, 09:51:28 AM »
Goin' to 0, YOLO

DanB

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #20 on: December 19, 2014, 11:23:52 AM »
I preface my remarks by cautioning that I'm about to quote from Yahoo so this is probably no better than even money as to accuracy................ Still,  Yahoo has LC forward PE at 861. Impressive on many levels.  :)

Fee

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #21 on: December 19, 2014, 11:30:23 AM »
I am considering an option position to hedge my LC lending investment. I figure the stock will crash if loans begin to default in high enough numbers.
Defaults don't really impact LC's income directly.  The stock will largely be driven on volume of originations, not credit quality.  But defaults do indirectly impact that if it materially impacts investor demand, bottle necking the amount that can be originated.

I'm not sure that I agree with you. A high default rate would lead to a drop in investor sentiment. Investors would demand higher rates. Would borrowers still be willing to pay those higher rates? I'm sure that increased regulation wouldn't be too far behind either.

Let's just hope we never have to find out who is right.

Fred93

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #22 on: December 19, 2014, 11:33:45 AM »
I preface my remarks by cautioning that I'm about to quote from Yahoo so this is probably no better than even money as to accuracy................ Still,  Yahoo has LC forward PE at 861. Impressive on many levels.  :)

In my model, the current price is only 280x 2015 income.  I presumed originations would double in 2015, and that OpEx would be double what it would have been in 2014 if it had only doubled over 2013.   Of course how they intend to manage OpEx is anybody's guess.

Prescott

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #23 on: December 19, 2014, 01:07:37 PM »
I am considering an option position to hedge my LC lending investment. I figure the stock will crash if loans begin to default in high enough numbers.
Defaults don't really impact LC's income directly.  The stock will largely be driven on volume of originations, not credit quality.  But defaults do indirectly impact that if it materially impacts investor demand, bottle necking the amount that can be originated.

I'm not sure that I agree with you. A high default rate would lead to a drop in investor sentiment. Investors would demand higher rates. Would borrowers still be willing to pay those higher rates? I'm sure that increased regulation wouldn't be too far behind either.

Let's just hope we never have to find out who is right.

*Directly* - of course they have brand risk if they start f'ing up their credit model that causes all kinds of problems. But I think rawraw's comment is that they already have the origination fee, and they only lose out a bit on the servicing fee

VirginiaBob

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #24 on: December 19, 2014, 02:10:29 PM »
Wow, good thing I sold!

mchu168

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Re: Lending Club Stock Price Speculation Dates/Info
« Reply #25 on: December 19, 2014, 02:41:09 PM »
Gee the froth is coming out faster than I thought. 

While the stock is wildly overvalued by every metric known to man kind, I think the company can essentially generate whatever top line growth they want over the near term by removing their throttle on originations.  A nice big beat and raise in Q4 results would be a positive catalyst to the stock.  Just saying...