Author Topic: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse  (Read 66902 times)

Fred93

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #165 on: May 14, 2016, 04:49:40 PM »
...Sanborn should stand out, take interviews, and explain to the public what's his ideas about all the questions. I am really disappointed about his silence these days, which may prove he is not qualified for a CEO and PPL should just jump the ship.

You may be precisely correct.  However, there is another possibility.

It may be that the issues he's dealing with are far more difficult than you and I know.  Scary possibility.  I don't want to think too hard about this.  I'm not good at inventing thriller story plots anyway.

Its difficult to wait for more facts.  The voyeur in us wants to run at internet speed, but we have no input.  Its like closing your eyes and looking at the colors. 

There are some clues to possible extreme difficulties...
1. No statements since the 5/9 8k filing.  That said they would extend the 10Q filing to 5/16, which is Monday.
2. 5/10 filing NT 10Q officially said delayed 10Q to 5/16.  Ok, that's consistent, and yet...
3. I would expect a conference call to go with the 10Q release, but no call has been scheduled. 

It is still possible that they could announce the call Monday morning, and do the call in the afternoon.


Wild Speculation: Another possibility is that they haven't scheduled a call because they are not yet certain that they can actually publish the 10Q on Monday.  Some difficult undisclosed problem is yet to be solved.



jheizer

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #166 on: May 14, 2016, 05:00:13 PM »
I don't know all the times when you are not allowed to announce things and such.  Is it possible we are stuck in one of those because of the delayed release?
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nonattender

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #167 on: May 14, 2016, 05:30:52 PM »
...Sanborn should stand out, take interviews, and explain to the public what's his ideas about all the questions. I am really disappointed about his silence these days, which may prove he is not qualified for a CEO and PPL should just jump the ship.

You may be precisely correct.  However, there is another possibility.

Yeah, that that's the hottest pen ever handed to a CEO by smiling, kindly, Old Wall Street guys - and Sanborn is too smart to touch it?

I got the impression that he was sincere when he was talking about "values" at LendIt;  I'm not sure that he sells out those "values".

On the up side, that would imply - at least to me - that if he's sticking around, things may be bad, now - but at least on the up and up.

Of course, he was fooled before.  So, maybe now is not the time to have faith in people but, rather, to have faith in "full transparency".

It could be taking a while to settle on the definition of "full" (or to explain the concept of "transparency", given those board members!).

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« Last Edit: May 14, 2016, 05:33:14 PM by nonattender »
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RT45

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #168 on: May 14, 2016, 05:57:49 PM »
Anyone have thoughts on recent insider filings?

nonattender

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #169 on: May 14, 2016, 06:10:57 PM »
Anyone have thoughts on recent insider filings?

Yes... So far, based on the Form 4's, they have the CFO, CTO, and CCO.
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Fred93

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #170 on: May 14, 2016, 06:25:41 PM »
Anyone have thoughts on recent insider filings?

I don't see anything unusual.  Form 4's are hard to follow, as you have to read the footnotes and look at the transaction code letters very carefully.  I know this because once upon a time I had to file these things, and people misinterpreted mine most of the time.

RL's resignation has triggered an accelerated expiration of his options, which is very common.  They're now expiring on 8/4/16 and 8/6/16.

I see he has some at a strike price of $9.56 .  Those will likely almost surely worthless.

mchu168

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #171 on: May 14, 2016, 10:26:30 PM »
This is rich. Nothing that the company has said or done warrants concern about bankruptcy or imminent collapse and people want the CEO to come out on TV and say say as much?  Why on earth would the company do this?  As someone already said, the stock is going down in concert with Ondeck, so the sell off is being driven by speculators shorting the industry, most likely.

Put it this way, nothing the company says right now will soothe a few hysterical investors who have very active imaginations (you know who you are).  My advise to LC, better to keep calm and carry on the business of running the company and wait until the fear subsides on its own.

Fred93

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #172 on: May 15, 2016, 02:47:22 AM »
Earlier in this thread I made a point about the fact that LC had not scheduled a conference call to go with the 5/16/16 filing of the 10Q. 

I went back and reread the transcript of the 5/9/16 call, and I've decided that it was a pretty complete earnings discussion, so it seems likely that no further earnings call is required.  When I listened to the call the 1st time, my mind was so focused on one particular issue that I didn't remember half of what they said.  Missing of course was discussion of projections or trends, but that's understandable given the expected business perturbations.

Meanwhile, I know that many of you are concerned about what might appear in the 5/16 10Q filing, or whether past financials might be restated, but my latest theory is that it will be boring.  I base this on something that Scott Sanborn said in the 5/9 call:
Quote
We currently do not believe that any of these circumstances individually or in the aggregate have any impact on our reported financial results.

Rob L

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #173 on: May 15, 2016, 10:01:19 AM »
... so the sell off is being driven by speculators shorting the industry, most likely.

Before last week the average daily volume for LC was 6M and change. Last week (M - F) the daily volumes were 95.79M, 92.96M, 52.74M, 49.34M and 44.95M). A total of 335.78M LC shares traded; LC has only 381.38M shares outstanding. So 88% of all outstanding LC shares changed hands (or passed through many hands) last week. It was not simply the shorts being naughty. They held perhaps 70M shares (April 29 last date known). Doubtful short interest is 0 shares today. To state what may only be obvious to me, there was a fair amount of long stock, mostly held by institutions, that headed for the exits and took whatever it could get. Their selling may or may not be finished. We'll only know when the stock stabilizes and volatility drops.

BTW: If you take a look at LC's stock trading on Friday 5/6 (before bombshell Monday) it appeared to be to be very strong. The post-On Deck post-Prosper drops had occurred. The stock was washed out and there were just no sellers that Friday. LC stock climbed pretty steadily all day. LC kept their secret very well because from Friday's stock trading pattern no one had a clue what the following Monday had in store.

hzhou9

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #174 on: May 15, 2016, 10:46:03 AM »
This is rich. Nothing that the company has said or done warrants concern about bankruptcy or imminent collapse and people want the CEO to come out on TV and say say as much?  Why on earth would the company do this?  As someone already said, the stock is going down in concert with Ondeck, so the sell off is being driven by speculators shorting the industry, most likely.

Put it this way, nothing the company says right now will soothe a few hysterical investors who have very active imaginations (you know who you are).  My advise to LC, better to keep calm and carry on the business of running the company and wait until the fear subsides on its own.

1. All investors are sensitive and have active imaginations
2. The key of LC business is trust and fear will snowball - 'wait' will just kill the company

Ribald

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #175 on: May 15, 2016, 11:23:05 AM »
I would rather they take their time and develop a reasoned defensible response than come out too soon with some half baked platitudes.

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #176 on: May 15, 2016, 12:24:54 PM »
Anyone have thoughts on recent insider filings?

I don't see anything unusual.  Form 4's are hard to follow, as you have to read the footnotes and look at the transaction code letters very carefully.  I know this because once upon a time I had to file these things, and people misinterpreted mine most of the time.

RL's resignation has triggered an accelerated expiration of his options, which is very common.  They're now expiring on 8/4/16 and 8/6/16.

I see he has some at a strike price of $9.56 .  Those will likely almost surely worthless.
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mchu168

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #177 on: May 15, 2016, 02:04:19 PM »

1. All investors are sensitive and have active imaginations
2. The key of LC business is trust and fear will snowball - 'wait' will just kill the company

Not all investors are panicking.  Maybe you are, but based on the various surveys and polls done here, the silent majority of forum participants are rather sanguine about bankruptcy potential and expected note returns. A few very visible media outlets and forum writers who are generally uninformed and looking to sensationalize current events are making a lot of noise.  The vast majority of market participants are calmly waiting to see this thing play out.

The key to LC business is confidence in the underwriting models and investor appetite for this kind of consumer credit risk.  A bunch of day traders short selling the stock is no reason for worry at this point.

lender90530

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #178 on: May 15, 2016, 05:21:05 PM »
I have an appetite for consumer credit risk. What I don't have an appetite for is equity risk in LC, which is exactly what you get when you invest in LC notes without a BRV. When you purchase LC notes, you are basically purchasing the equivalent of a LC junk bond whose returns are tied to the notes that you selected. You are at the mercy of business decisions that LC makes to maximize shareholder wealth. They can expend cash to buy back their stock (which they have already done and have authorized themselves to do more of), they can incur debt to make acquisitions, etc.. As far as I know, unlike bondholders, noteholders don't have any protective covenants to restrict LC's behavior to protect their interests. If I were interested in investing in junk bonds, I would do so only through a well diversified portfolio of them like the HYG ETF has. Institutional investors are not stupid; that's why they demand LC protects them through a BRV.

LonghornSF

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Re: LendingClub stock Plunges After CEO Quits, Firm Finds Loan-Sale Abuse
« Reply #179 on: May 15, 2016, 08:54:50 PM »
I have an appetite for consumer credit risk. What I don't have an appetite for is equity risk in LC, which is exactly what you get when you invest in LC notes without a BRV. When you purchase LC notes, you are basically purchasing the equivalent of a LC junk bond whose returns are tied to the notes that you selected. You are at the mercy of business decisions that LC makes to maximize shareholder wealth. They can expend cash to buy back their stock (which they have already done and have authorized themselves to do more of), they can incur debt to make acquisitions, etc.. As far as I know, unlike bondholders, noteholders don't have any protective covenants to restrict LC's behavior to protect their interests. If I were interested in investing in junk bonds, I would do so only through a well diversified portfolio of them like the HYG ETF has. Institutional investors are not stupid; that's why they demand LC protects them through a BRV.

Agree with your sentiment. The only thing that gives me peace of mind is that Lending Club is still sitting on a huge net cash balance. Even assuming revenue goes to ZERO, which would never happen, they could survive for at least another year on their cash balance.

I still can't get over how ridiculous this whole affair is. RL must be either the stupidest or greediest man alive to throw away the whole company like this. The board has also greatly mishandled the situation. I had a lot of reservations about LC but to see this happen is an absolute shame.  :-\