Author Topic: LC getting desperate for funding? "We're Here to Answer Any Questions" email  (Read 13047 times)

LonghornSF

  • Full Member
  • ***
  • Posts: 208
    • View Profile
Just received this in my inbox:

Quote

Dear XXXXXXXXXXXX,
 
We understand that recent media coverage about Lending Club may have brought about questions for you. We wanted to let you know that we're here to answer your questions. While there are some things we can't comment on, we welcome the opportunity to talk to you.
 
Trust is at the center of our business, and we're committed to earning it from you every day.
 
Rest assured that there has been no change in our commitment to our investors. We're servicing and processing borrower payments just like we always have, and the interest and principal payments that borrowers make will continue to be passed on to you just as they were before. We remain laser focused on our mission to make investing more rewarding for you, our investors.
 
Reach out to us
 
We're available by phone at (888) 596-3159 7am-5pm PT, Monday through Friday. Or, contact us via email anytime at investing@lendingclub.com.
 
Best regards,
 
The Lending Club Team


PhilGD

  • Full Member
  • ***
  • Posts: 150
    • View Profile
    • Email
I seem to remember this forum complaining about the lack of communication from LC during the past week and a half. And now that they're finally reaching out, they're "desperate for funding?"

I get that we have cause for being concerned, but I really don't think it's time to get out the pitchforks.

rawraw

  • Hero Member
  • *****
  • Posts: 2793
    • View Profile
I hope everyone on this forum reaches out and includes the three letters BRV in their reply.

Sent from my SAMSUNG-SM-G935A using Tapatalk


sommers

  • Jr. Member
  • **
  • Posts: 77
    • View Profile
    • Email
I haven't gotten any email

McLu

  • Newbie
  • *
  • Posts: 8
    • View Profile
    • Email
Here are concerns and suggestions I sent to LC. Comments are welcome:

--

How Lending Club can win back the trust of investors
 
The original peer-to-peer (P2P) business model is still the future. Investors receive an alternative asset class that generally will have lower correlation with stocks and high returns. Borrowers receive credit at lower rates than a traditional credit card or access to credit they previously didn’t have. This is as true today as it was before Renaud Laplanche, CEO and Founder of LC, resigned on Monday.

The underlying challenges primarily focus on how to expand this winning business model in a manner that is sustainable, grows the trust of both stock holders and retail loan investors, grows the trust and appreciation of borrowers across risk grades, and convinces regulators and the public more generally that LC is a win-win for all parties involved.

Management needs to act quickly to repair the trust of investors. The secondary market has grown from 300,000 to 520,000 since Monday. Great loans have decreased in price through the week and are now selling at discounts of 2-4%. Why would an invest purchase a loan at par on the primary market when they can get the same loan at a discount with 12 months of perfect performance? The underlying credit risk of these loans cannot justify these discounts. What has changed in the minds of investors is counterparty credit risk and liquidity risk. The risks that LC will not be around long enough to service the loans or that if they ever wanted to liquidate their loans they would take material losses relative to intrinsic value. What this means is that there has been a tremendous drop in demand from retail loan investors, the original P2P investor which justified the LC market cap of $10 Billion.

In my view, LC’s management should consider the following nine steps to win back the trust of both stock investors and those investing in their loans. In short,

How to win back the trust of stock investors

1.   Convince them that growth in loan originations going forward will be sustainable.
2.   Segregate growth in loans that are potentially in violation of state Usury laws in financial statements.
3.   Convince them that LC’s underwriting model is consistent with Fair Lending laws.
4.   Avoid deterioration in loan quality with more than just tighter underwriting standards.
5.   Finally, stock investors will need to see LC win back the trust of retail investors.

How to win back the trust of retail loan investors

6.   Reach out directly to P2P lenders via lending blogs like Lend Academy and address their concerns.
7.   Construct a Bankruptcy Remote Vehicle (BRV) for all issued notes and more robust backup servicing.
8.   Convince them that institutional investors and insiders will not receive preferential treatment over retail investors.
9.   Show how loan performance would likely be affected by a recession.

Best regards,
LC stock and loan investor

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
I seem to remember this forum complaining about the lack of communication from LC during the past week and a half. And now that they're finally reaching out, they're "desperate for funding?"

I get that we have cause for being concerned, but I really don't think it's time to get out the pitchforks.
I do not see the letter as desperate, see it as reassuring. 
"Trust is at the center of our business, and we're committed to earning it from you every day.
 
Rest assured that there has been no change in our commitment to our investors."

They are not asking for funding, they are trying to boost shaky confidence levels.  "Trust" and "commitment" are strong reassuring language. 

LonghornSF

  • Full Member
  • ***
  • Posts: 208
    • View Profile
I seem to remember this forum complaining about the lack of communication from LC during the past week and a half. And now that they're finally reaching out, they're "desperate for funding?"

It's interesting timing considering they couldn't bother giving retail investors the time of the day until this week. Maybe if they had treated retail better all along they wouldn't be in the mess they're in.

Quote
"Trust" and "commitment" are strong reassuring language.

Wow, sure didn't take much to win your trust back.  ??? Hope you don't receive any emails from Nigerian princes that mention how trustworthy and committed they are.

Fred93

  • Hero Member
  • *****
  • Posts: 2231
    • View Profile
You guys...  First folks blast LC because they are communicating inadequately.  Then LC sends a letter, asking for comment, giving their address and phone number, attempting to open some communication.  Now they are blasted as this is a sign of desperation.  Really. 

Communication is good. 

nonattender

  • Hero Member
  • *****
  • Posts: 725
  • I am not here.
    • View Profile
You guys...  First folks blast LC because they are communicating inadequately.  Then LC sends a letter, asking for comment, giving their address and phone number, attempting to open some communication.  Now they are blasted as this is a sign of desperation.  Really. 

Communication is good.

Truth.
A little nonsense now and then is relished by the wisest men.

McLu

  • Newbie
  • *
  • Posts: 8
    • View Profile
    • Email
I just spoke with a member of the LC team. The individual was very interested in my suggestions.

This is your opportunity to help LC help you...I recommend that you take it!

fliphusker

  • Sr. Member
  • ****
  • Posts: 463
    • View Profile
    • Email
I seem to remember this forum complaining about the lack of communication from LC during the past week and a half. And now that they're finally reaching out, they're "desperate for funding?"

It's interesting timing considering they couldn't bother giving retail investors the time of the day until this week. Maybe if they had treated retail better all along they wouldn't be in the mess they're in.

Quote
"Trust" and "commitment" are strong reassuring language.

Wow, sure didn't take much to win your trust back.  ??? Hope you don't receive any emails from Nigerian princes that mention how trustworthy and committed they are.
What makes you think they have won me back, or that I left in the first place?  But from my poll I posted, I also stated there I was only currently buying FOLIO, so you take that part as you would like with my confidence in LC. 
Am I worried about the ambulance chasers, not overly.  Am I worried about the DOJ, somewhat, but big brother just doing its job.  Grand jury is nothing special, long ways to go even if finding are bad.
Stock is still all over the place, but volume is down, thus volatility. 
Am I worried about bankruptcy?  Not anytime in the foreseeable future. 
I am going to ride out the storm and snag great deals on FOLIO while others panic.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

― Warren Buffett
So I am going to continue doing FOLIO until the deals are gone, then go back to buying on LC as normal until Q2 released.  Then will rethink my position then.

RaymondG

  • Full Member
  • ***
  • Posts: 247
    • View Profile
    • Email
Replied the email emphasizing the importance of BRV for me to continue buying the notes.

storm

  • Full Member
  • ***
  • Posts: 136
    • View Profile
I received the e-mail for my IRA I opened a few months ago, but not for my 8-year-old taxable account.  At any rate, I replied as well suggesting they implement a BRV.  I'm seeing some deeper discounted notes on Folio too.  Maybe LC will hear us.

dompazz

  • Full Member
  • ***
  • Posts: 224
    • View Profile
I have not received the letter either.

Rob L

  • Hero Member
  • *****
  • Posts: 2119
    • View Profile
Letter, what letter?  :o

(Sarcasm; lest you think otherwise I am aware of it and did not receive one).