Author Topic: Email from Lending Club  (Read 18708 times)

rawraw

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Re: Email from Lending Club
« Reply #30 on: June 05, 2016, 06:53:19 AM »
I need to know that LC's cash burn rate won't exceed the remaining life cycle of the notes my portfolio.

You already know that.   Look at their quarterly expenses.  Look at their cash.  Do arithmetic.
If only it was that simple.  Ask any investor who bought a stock because of the cash on the balance sheet how quickly management can squander it, if they so choose to do so.

Yes, it is possible for management to squander assets of a company.  So how on earth do you sleep at night owning common stocks of any company?  By your logic, we should own no stocks for fear that all assets can be squandered.

Here we have something much safer than common stocks.  We're at the top of the balance sheet, rather than at the bottom (ie common stocks), and completely covered by loans on the asset side.  Wow.

I see so much irrational fear.  Its real ... but its irrational.
Post #1.  A statement of fact.
Post #2.  Poster #1, you have irrational fear.

You are making lots of assumptions, since there was no logic or conclusion in the statement.  Perhaps I am not the one who should visit my rationality when discussing LC?  It seems people here want to group statements into "bull" or "bear" instead of actually discussing the issues.  This bull vs bear mentality is likely why someone like Rob L has "egg on his face."  Every time I point out a risk that should be considered, I am equated to being on CNBC yelling short LC now.  It's been like this ever since I've been on this forum, but it's especially bad lately.  Just take a deep breath, every statement of risk is not questioning the safety of your investment. . .

Perhaps its because I'm used to dealing with investment professionals.  But there are risks and then probabilities to those risks.  You can't make a conclusion without both. I could assign a 10% probability to LC's cash disappearing or a 90% probability.  Without that data, you are irrationally attacking a risk factor.  You must get very upset every 10Q you get, with all those irrational risks disclosed.

« Last Edit: June 05, 2016, 06:55:24 AM by rawraw »

sommers

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Re: Email from Lending Club
« Reply #31 on: June 05, 2016, 06:56:09 AM »
Stand in line with the embarrassment thing.  I mentioned LC to my nephew a few years ago. We don't get to visit much as he lives on Long Island and I'm in Virginia. My Mom lives up there and I went for a visit in February. The subject of LC came up and the next thing you know I'm helping him get an account set up. Fast forward to May, he's just about fully invested and I have to make the call.. "maybe we should slow down on this a bit, the CEO's been fired by the BOD for not being "forthcoming" and, well, ..... ". My brother-in-law was always skeptical so it's egg on face time. It's a very small deal though. My brother-in-law and I are very close and I will personally guarantee my nephew comes out whole. Still... embarrassing! (And no, if you're thinking I might have gotten an incentive from LC for the reference. I didn't).

Meanwhile LC has done absolutely nothing since 5/9 to make me reconsider exiting the playing field. (I'll help my nephew do the same; with apologies to him and my brother-in-law).

Think my major problem is that this fiasco has enlightened me on how LC moved to relying on big money/institutional funding versus little guys (like they purportedly started with).  Common sense tells that the big boys will get better deals--whether reflected in pricing--some kind of discounts or rebates--or first crack at choice loans--or a combination of all..  IF I was a big money institution type---and LC told me that I had to get in line and be a buyer just like some guy with $10K--I'd tell them to go find a different sucker.  So, please don't tell me that everyone is treated equally.  And then we have the misconduct of the departed CEO
I am liquidating and it's an arduous process.  I had been in set and forget mode for 3 years.  Fortunately my auto investing was set at 3 year terms.  I am now realizing how illiquid LC is for us note investors.  Began having concerns about the whole business in February as I was reading about sub prime auto loans being the next problem (on top of student loans--on top of who knows what else kind of loans).  And the trend towards higher interest rates (which assures "old" loans would suffer discounts moving forward
Since early March I ended auto investing and had planned to just let my notes run off (and exit this business) and when this fiasco broke--I started learning about folio and have been selling notes there.  I've worked off about 30% of my inventory and have not gone below par (not counting the 1% selling fee)
I'm about to go discount slowly but surely. 
I BET I'M NOT THE ONLY ONE WHO IS GETTING OUT----I HAVE SEEN ZERO FROM L C TO ASSUAGE MY CONCERNS.  THEIR EMAIL ASSURANCES ARE LAME (AT BEST). I'LL TAKE ON THE NOTE CREDIT RISK (THAT WAS PART OF THE DEAL)--BUT NOT LC'S CORPORATE RISK.  TAKING ON BOTH IS A DEAL KILLER FOR THIS LITTLE GUY.  IF I KNEW MY MONEY WAS SAFE FROM AN L C B-K OR SOME FURTHER SHENANNIGANS---I MIGHT HANG AROUND.  BUT I'VE READ NOTHING THAT ALLAYS MY CONCERN.
SO I AM OUTTA HERE (THOUGH IT'S A WHOLE LOT TOUGHER TO EXIT THAN I HAD IMAGINED)
LIVE AND LEARN

rawraw

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Re: Email from Lending Club
« Reply #32 on: June 05, 2016, 06:58:13 AM »
^Remember that LC is a public company and even if they are doing something to protect your position, they have to tell you and investors at the same time if its material. And then they are subject to litigation if something goes wrong.  So I wouldn't mistake their silence for lack of action -- we will see with time

Also, I don't suspect there is going to be a high correlation with subprime auto and prime unsecured lending.

sommers

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Re: Email from Lending Club
« Reply #33 on: June 05, 2016, 07:02:51 AM »
I need to know that LC's cash burn rate won't exceed the remaining life cycle of the notes my portfolio.

You already know that.   Look at their quarterly expenses.  Look at their cash.  Do arithmetic.
If only it was that simple.  Ask any investor who bought a stock because of the cash on the balance sheet how quickly management can squander it, if they so choose to do so.

Yes, it is possible for management to squander assets of a company.  So how on earth do you sleep at night owning common stocks of any company?  By your logic, we should own no stocks for fear that all assets can be squandered.

Here we have something much safer than common stocks.  We're at the top of the balance sheet, rather than at the bottom (ie common stocks), and completely covered by loans on the asset side.  Wow.

I see so much irrational fear.  Its real ... but its irrational.
Post #1.  A statement of fact.
Post #2.  Poster #1, you have irrational fear.

You are making lots of assumptions, since there was no logic or conclusion in the statement.  Perhaps I am not the one who should visit my rationality when discussing LC?  It seems people here want to group statements into "bull" or "bear" instead of actually discussing the issues.  This bull vs bear mentality is likely why someone like Rob L has "egg on his face."  Every time I point out a risk that should be considered, I am equated to being on CNBC yelling short LC now.  It's been like this ever since I've been on this forum, but it's especially bad lately.  Just take a deep breath, every statement of risk is not questioning the safety of your investment. . .

Perhaps its because I'm used to dealing with investment professionals.  But there are risks and then probabilities to those risks.  You can't make a conclusion without both. I could assign a 10% probability to LC's cash disappearing or a 90% probability.  Without that data, you are irrationally attacking a risk factor.  You must get very upset every 10Q you get, with all those irrational risks disclosed.
I think the problem is that many (like me) had not considered the risk we were taking with a company like L C as our intermediary.  Hey--I'll admit to stupid on that one.  I guess I thought I was making loans to individuals and that was the program.  I never considered the legal standing of my investments (should LC go B-K).  There should be some kind of insurance or assurance (other than gratutitous emails from the new CEO--which have said NOTHING)---whether that's this BRV thing I'm reading people are advocating or whatever. 
I still do not understand my standing should L C go B-K.  I have read a few theories here--but I have not been convinced (assuaged)

rawraw

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Email from Lending Club
« Reply #34 on: June 05, 2016, 07:05:50 AM »
Yeah I understand, which is why I try to point them out. For example, we could all get a false sense of comfort from all that cash and then see they funded loans with it. Doesn't mean it's going to happen, but it should be considered when thinking of that protection. Which is why I said "it's not that simple"

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sommers

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Re: Email from Lending Club
« Reply #35 on: June 05, 2016, 07:09:48 AM »
^Remember that LC is a public company and even if they are doing something to protect your position, they have to tell you and investors at the same time if its material. And then they are subject to litigation if something goes wrong.  So I wouldn't mistake their silence for lack of action -- we will see with time

Also, I don't suspect there is going to be a high correlation with subprime auto and prime unsecured lending.
Why not ?  I am reading there is increasing credit deterioration through out the economy.  You don't think some of these E F G borrower types haven't gotten some of the "funny money"?  I can't watch TV without seeing these no money down---no credit check auto sales people pitching me on a used car.  It is getting reminiscent of the home loan frenzy--no docs--no downpayment loans on housing.  How about Friday's "employment" numbers?  Some think we are in a recession already.  If your an oil worker---I'll bet your calling it a depression

sommers

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Re: Email from Lending Club
« Reply #36 on: June 05, 2016, 07:12:34 AM »
Yeah I understand, which is why I try to point them out. For example, we could all get a false sense of comfort from all that cash and then see they funded loans with it. Doesn't mean it's going to happen, but it should be considered when thinking of that protection. Which is why I said "it's not that simple"

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nonattender

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Re: Email from Lending Club
« Reply #37 on: June 05, 2016, 07:14:02 AM »
I need to know that LC's cash burn rate won't exceed the remaining life cycle of the notes my portfolio.

You already know that.   Look at their quarterly expenses.  Look at their cash.  Do arithmetic.
If only it was that simple.  Ask any investor who bought a stock because of the cash on the balance sheet how quickly management can squander it, if they so choose to do so.

Yes, it is possible for management to squander assets of a company.  So how on earth do you sleep at night owning common stocks of any company?  By your logic, we should own no stocks for fear that all assets can be squandered.

Here we have something much safer than common stocks.  We're at the top of the balance sheet, rather than at the bottom (ie common stocks), and completely covered by loans on the asset side.  Wow.

I see so much irrational fear.  Its real ... but its irrational.

While "squander" was probably the not the right word, the "fear" that LC will have to begin using its own balance sheet to fund loans is not irrational.  They have a finite amount of cash (we can argue over whether it's ~600-800mm, but let's not) with which to do that, while they do several times that amount in originations per quarter.  We're seeing reports from borrowers (anecdotal but we certainly never saw these before a month or so ago) that they're being told to wait 14-30 days for funding and that many loans are being held back from the platform for some length of time, so, it's reasonable to infer that there's a backlog of unfunded loans, already, unknown in size, but sufficient that LC is willing to inconvenience borrowers and give them 2-4 week funding delay estimates when they inquire.

One takes that information, then factors in that LC makes, let's say, ~85% of its revenues on origination fees for newly funded loans - leaving one to wonder what this slowdown/backlog will have done to LC's revenues in the coming quarter (not counting loans lost to possible attrition, as some unknown % of borrowers decide to go get funded elsewhere).  Conceivably, it's rational to assume that a savings has been had in the last month on marketing spend (which has likely been scaled back, though, given that many of the bank partnerships were two-way partnerships, wherein many of the large network of banks who purchased loans also referred customers toward LC to get loans, which was one of the lowest-cost borrower acquisition channels LC used in its managed channel mixture, it's not entirely irrational to think that their borrower acquisition cost may actually have gone up, at least on single unit economics basis).

I could go on, but all signs that I see point to origination shortfall, revenue shortfall, very good possibility of having to deploy cash on hand in order to fund loans, lower marketing spend savings than most people seem to think, etc, leading to lower revenue and some margin compression, on top of that, which, if the inability to attract huge amounts of capital continues, leads LC to tap a warehouse...

And if that happens, which I don't think is irrational, as, if given enough transparency, we could likely put a non-zero probabilty on it - then this idea to which you cling of LC's retail noteholders being at the top of the capital stack would be made "irrational" by LC's tap into further leverage against the balance sheet (loans/lines/warehouse-facilities) in order to fund loans and continue its operations...

I really don't want to argue with you about this - I kind of lost patience for you when you stated in another thread that you "couldn't care less" whether insiders with fiduciary responsibilities to the company engaged in undisclosed and ethically challenging behaves - but when you start tossing around terms like "irrational", in regards to what other people are expressing, I'm going to "call bullshit".

That's a behavioural finance term of art, by the way.  Nothing personal.
A little nonsense now and then is relished by the wisest men.

sommers

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Re: Email from Lending Club
« Reply #38 on: June 05, 2016, 08:01:07 AM »
I need to know that LC's cash burn rate won't exceed the remaining life cycle of the notes my portfolio.

You already know that.   Look at their quarterly expenses.  Look at their cash.  Do arithmetic.
If only it was that simple.  Ask any investor who bought a stock because of the cash on the balance sheet how quickly management can squander it, if they so choose to do so.

Yes, it is possible for management to squander assets of a company.  So how on earth do you sleep at night owning common stocks of any company?  By your logic, we should own no stocks for fear that all assets can be squandered.

Here we have something much safer than common stocks.  We're at the top of the balance sheet, rather than at the bottom (ie common stocks), and completely covered by loans on the asset side.  Wow.

I see so much irrational fear.  Its real ... but its irrational.

While "squander" was probably the not the right word, the "fear" that LC will have to begin using its own balance sheet to fund loans is not irrational.  They have a finite amount of cash (we can argue over whether it's ~600-800mm, but let's not) with which to do that, while they do several times that amount in originations per quarter.  We're seeing reports from borrowers (anecdotal but we certainly never saw these before a month or so ago) that they're being told to wait 14-30 days for funding and that many loans are being held back from the platform for some length of time, so, it's reasonable to infer that there's a backlog of unfunded loans, already, unknown in size, but sufficient that LC is willing to inconvenience borrowers and give them 2-4 week funding delay estimates when they inquire.

One takes that information, then factors in that LC makes, let's say, ~85% of its revenues on origination fees for newly funded loans - leaving one to wonder what this slowdown/backlog will have done to LC's revenues in the coming quarter (not counting loans lost to possible attrition, as some unknown % of borrowers decide to go get funded elsewhere).  Conceivably, it's rational to assume that a savings has been had in the last month on marketing spend (which has likely been scaled back, though, given that many of the bank partnerships were two-way partnerships, wherein many of the large network of banks who purchased loans also referred customers toward LC to get loans, which was one of the lowest-cost borrower acquisition channels LC used in its managed channel mixture, it's not entirely irrational to think that their borrower acquisition cost may actually have gone up, at least on single unit economics basis).

I could go on, but all signs that I see point to origination shortfall, revenue shortfall, very good possibility of having to deploy cash on hand in order to fund loans, lower marketing spend savings than most people seem to think, etc, leading to lower revenue and some margin compression, on top of that, which, if the inability to attract huge amounts of capital continues, leads LC to tap a warehouse...

And if that happens, which I don't think is irrational, as, if given enough transparency, we could likely put a non-zero probabilty on it - then this idea to which you cling of LC's retail noteholders being at the top of the capital stack would be made "irrational" by LC's tap into further leverage against the balance sheet (loans/lines/warehouse-facilities) in order to fund loans and continue its operations...

I really don't want to argue with you about this - I kind of lost patience for you when you stated in another thread that you "couldn't care less" whether insiders with fiduciary responsibilities to the company engaged in undisclosed and ethically challenging behaves - but when you start tossing around terms like "irrational", in regards to what other people are expressing, I'm going to "call bullshit".

That's a behavioural finance term of art, by the way.  Nothing personal.

good post.  your basic run on the bank.  And no one has explained to me what MY notes standing are in case L C's balance sheet blows up (or even if it doesn't "blow up")
It is totally rational for note investors to be worried.  We all have seen too many fiascos in recent times. 

Fred93

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Re: Email from Lending Club
« Reply #39 on: June 05, 2016, 08:04:13 AM »
I kind of lost patience for you when you stated in another thread that you "couldn't care less" whether insiders with fiduciary responsibilities to the company engaged in undisclosed and ethically challenging behaves

I didn't say anything of the kind.  You need to unclench your teeth enough so that you can once again read clearly.

I do care when insiders engage in unethical behaviors.  I was talking about a specific act which I do not think was in any way unethical.  (ie whether Mack loaned his personal money to Laplanche.)  This distinction sorta matters.

I tire of the mob yelling "burn the witch!  burn the witch!"  I'd rather discuss the facts.

Back to what could happen...  I simply have a different assessment about the likelihood of some of the sequences of events that people are proposing.  I do agree that many of these scenarios have a non-zero probability.  I just think their probability is very small.

I would feel more comfortable if LC were to announce a substantial layoff.  That would make it more clear that they are comfortable with slowing growth, which would make it clearly less likely that management would consider doing something panicy like using the balance sheet in new and dangerous ways to pump growth in originations.  (I don't need to go into detail, because you and others have done this for me.)

Like many others, I would be a little bit more comfortable with a BRV, although a BRV is not a panacea. 

Concern is rational.  The panic and trash talking I see here every day is not rational.


« Last Edit: June 05, 2016, 08:07:37 AM by Fred93 »

sommers

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Re: Email from Lending Club
« Reply #40 on: June 05, 2016, 10:30:13 AM »
I kind of lost patience for you when you stated in another thread that you "couldn't care less" whether insiders with fiduciary responsibilities to the company engaged in undisclosed and ethically challenging behaves

I didn't say anything of the kind.  You need to unclench your teeth enough so that you can once again read clearly.

I do care when insiders engage in unethical behaviors.  I was talking about a specific act which I do not think was in any way unethical.  (ie whether Mack loaned his personal money to Laplanche.)  This distinction sorta matters.

I tire of the mob yelling "burn the witch!  burn the witch!"  I'd rather discuss the facts.

Back to what could happen...  I simply have a different assessment about the likelihood of some of the sequences of events that people are proposing.  I do agree that many of these scenarios have a non-zero probability.  I just think their probability is very small.

I would feel more comfortable if LC were to announce a substantial layoff.  That would make it more clear that they are comfortable with slowing growth, which would make it clearly less likely that management would consider doing something panicy like using the balance sheet in new and dangerous ways to pump growth in originations.  (I don't need to go into detail, because you and others have done this for me.)

Like many others, I would be a little bit more comfortable with a BRV, although a BRV is not a panacea. 

Concern is rational.  The panic and trash talking I see here every day is not rational.

LC needs some high  profile people and/or investor/s to step up.  IF they think the little people investors are going to prop this thing up--then we are all in serious trouble.
They have poisoned the well for me (and I'll bet I'm not unique).  I do not have enough knowledge nor certainly confidence to stay in this "game".  I haven't read anything that assuages my fears. 
The simple fact that such a relatively minor indiscretion (by the former CEO) has thrown this business into chaos--is unacceptable.  The returns are simply not high enough to justify the investment risk for me
I am bailing out and will likely take some hits (deep discounts) to get it done

fliphusker

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Re: Email from Lending Club
« Reply #41 on: June 05, 2016, 02:31:52 PM »
Quote
Think my major problem is that this fiasco has enlightened me on how LC moved to relying on big money/institutional funding versus little guys (like they purportedly started with).  Common sense tells that the big boys will get better deals--whether reflected in pricing--some kind of discounts or rebates--or first crack at choice loans--or a combination of all..  IF I was a big money institution type---and LC told me that I had to get in line and be a buyer just like some guy with $10K--I'd tell them to go find a different sucker.  So, please don't tell me that everyone is treated equally.  And then we have the misconduct of the departed CEO
I am liquidating and it's an arduous process.  I had been in set and forget mode for 3 years.  Fortunately my auto investing was set at 3 year terms.  I am now realizing how illiquid LC is for us note investors.  Began having concerns about the whole business in February as I was reading about sub prime auto loans being the next problem (on top of student loans--on top of who knows what else kind of loans).  And the trend towards higher interest rates (which assures "old" loans would suffer discounts moving forward
Since early March I ended auto investing and had planned to just let my notes run off (and exit this business) and when this fiasco broke--I started learning about folio and have been selling notes there.  I've worked off about 30% of my inventory and have not gone below par (not counting the 1% selling fee)
I'm about to go discount slowly but surely. 
I BET I'M NOT THE ONLY ONE WHO IS GETTING OUT----I HAVE SEEN ZERO FROM L C TO ASSUAGE MY CONCERNS.  THEIR EMAIL ASSURANCES ARE LAME (AT BEST). I'LL TAKE ON THE NOTE CREDIT RISK (THAT WAS PART OF THE DEAL)--BUT NOT LC'S CORPORATE RISK.  TAKING ON BOTH IS A DEAL KILLER FOR THIS LITTLE GUY.  IF I KNEW MY MONEY WAS SAFE FROM AN L C B-K OR SOME FURTHER SHENANNIGANS---I MIGHT HANG AROUND.  BUT I'VE READ NOTHING THAT ALLAYS MY CONCERN.
SO I AM OUTTA HERE (THOUGH IT'S A WHOLE LOT TOUGHER TO EXIT THAN I HAD IMAGINED)
LIVE AND LEARN
I am curious to why a few are jealous that institutions getting a discount is bad.  Let's say that LC give Citi a 1% discount on 200M worth of notes each year.  How is this discount harming you?  Walmart gets discounts from manufacturers due the bulk amount that they buy for.  You see this same discount structure for everything on the net for sale.  "Spend $50 and you get free shipping."  So do you get mad that you did not spend $50 on Amazon and had to pay for shipping while others spend more and get free shipping?

Choice loans -- I have seen this discussed a number of times since RL stepped down.  What is a choice loan or note?  Your definition and mine are going to be completely different, I assume.  Right now there are 19 of what I consider choice loans that pass my stringent filter.  That is the most there has been since I joined in Feb. 
No reason to mash your caps locks key to dust, we can read.  Clearly by the poll about what direction people are going here, you are not the only one getting out.  You are in the minority though. 
It is easy to get out on the FOLIO market.  All you have to do is squander all your profits on the notes you have been sitting on for a couple of years, and break even.  People will buy your perfectly good notes at 3-5% discounts, depending on their YTM and payment history.  That is what I have been paying for notes on FOLIO.  20% YTM for notes 8 months old with discount of 6% with zero payment issues that meet my filters, ya man, I am all over that. 
As I am sure nonattender has missed my gambling analogies, will toss one out.  You know the only guaranteed money you will ever get in Vegas?  Cash out of the ATM.  :)

mchu168

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Re: Email from Lending Club
« Reply #42 on: June 05, 2016, 02:49:30 PM »
For all of you scared away from investing in LC loans, please continue to stay on the sidelines.  I'm having a much easier time finding loans nowadays, and LC now seems to have more incentive to make the returns attractive for investors going forward vs. the days where any crappy loan was getting funded in 250ms.

As for the risks, I think well informed people can make their own judgement. I certainly didn't come here looking for deep insight and I haven't been disappointed.  It does boil down to a bull-bear debate for me, because as is always the case there are some who have negative biases on a story and some who see the glass half full.  If a newbie comes here and reads 50 negative posts from "bears" they will leave here with an unrealistically "bearish" view.  Thank goodness for Fred93 (a voice of reason among the herd).  Anyways, I think it's useful to understand posters' biases...

« Last Edit: June 05, 2016, 02:51:37 PM by mchu168 »

Fred93

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Re: Email from Lending Club
« Reply #43 on: June 05, 2016, 09:50:43 PM »
Just got this email from Lending Club ...
$5,000 - $9,999 - bonus $100
$10,000 - $24,999 - bonus $200
$25,000 - $49,000 - bonus $500
$50,000 - $99,000 - bonus $1,000
$100,000+ - bonus $2,000

Whoa!  I got my copy of this mail on June 3rd, but the amounts are different!  My bonus amounts are exactly half of the above numbers.

Different bonus amounts for different investors.  I don't know why.  My guess is that they rolled this out slowly so they could see investor reaction, and reaction was so good that they cut the bonus in half before they got to me.  Alternately, maybe they just don't like me.

sommers

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Re: Email from Lending Club
« Reply #44 on: June 06, 2016, 05:07:11 AM »
Quote
Think my major problem is that this fiasco has enlightened me on how LC moved to relying on big money/institutional funding versus little guys (like they purportedly started with).  Common sense tells that the big boys will get better deals--whether reflected in pricing--some kind of discounts or rebates--or first crack at choice loans--or a combination of all..  IF I was a big money institution type---and LC told me that I had to get in line and be a buyer just like some guy with $10K--I'd tell them to go find a different sucker.  So, please don't tell me that everyone is treated equally.  And then we have the misconduct of the departed CEO
I am liquidating and it's an arduous process.  I had been in set and forget mode for 3 years.  Fortunately my auto investing was set at 3 year terms.  I am now realizing how illiquid LC is for us note investors.  Began having concerns about the whole business in February as I was reading about sub prime auto loans being the next problem (on top of student loans--on top of who knows what else kind of loans).  And the trend towards higher interest rates (which assures "old" loans would suffer discounts moving forward
Since early March I ended auto investing and had planned to just let my notes run off (and exit this business) and when this fiasco broke--I started learning about folio and have been selling notes there.  I've worked off about 30% of my inventory and have not gone below par (not counting the 1% selling fee)
I'm about to go discount slowly but surely. 
I BET I'M NOT THE ONLY ONE WHO IS GETTING OUT----I HAVE SEEN ZERO FROM L C TO ASSUAGE MY CONCERNS.  THEIR EMAIL ASSURANCES ARE LAME (AT BEST). I'LL TAKE ON THE NOTE CREDIT RISK (THAT WAS PART OF THE DEAL)--BUT NOT LC'S CORPORATE RISK.  TAKING ON BOTH IS A DEAL KILLER FOR THIS LITTLE GUY.  IF I KNEW MY MONEY WAS SAFE FROM AN L C B-K OR SOME FURTHER SHENANNIGANS---I MIGHT HANG AROUND.  BUT I'VE READ NOTHING THAT ALLAYS MY CONCERN.
SO I AM OUTTA HERE (THOUGH IT'S A WHOLE LOT TOUGHER TO EXIT THAN I HAD IMAGINED)
LIVE AND LEARN
I am curious to why a few are jealous that institutions getting a discount is bad.  Let's say that LC give Citi a 1% discount on 200M worth of notes each year.  How is this discount harming you?  Walmart gets discounts from manufacturers due the bulk amount that they buy for.  You see this same discount structure for everything on the net for sale.  "Spend $50 and you get free shipping."  So do you get mad that you did not spend $50 on Amazon and had to pay for shipping while others spend more and get free shipping?

Choice loans -- I have seen this discussed a number of times since RL stepped down.  What is a choice loan or note?  Your definition and mine are going to be completely different, I assume.  Right now there are 19 of what I consider choice loans that pass my stringent filter.  That is the most there has been since I joined in Feb. 
No reason to mash your caps locks key to dust, we can read.  Clearly by the poll about what direction people are going here, you are not the only one getting out.  You are in the minority though. 
It is easy to get out on the FOLIO market.  All you have to do is squander all your profits on the notes you have been sitting on for a couple of years, and break even.  People will buy your perfectly good notes at 3-5% discounts, depending on their YTM and payment history.  That is what I have been paying for notes on FOLIO.  20% YTM for notes 8 months old with discount of 6% with zero payment issues that meet my filters, ya man, I am all over that. 
As I am sure nonattender has missed my gambling analogies, will toss one out.  You know the only guaranteed money you will ever get in Vegas?  Cash out of the ATM.  :)
IF the reality is it takes a 3-5% discount to sell "perfectly good notes" then I call that a bad investment.  So, why would I want to continue investing in L C notes?
Not to mention the lack of liquidity (at a reasonable price)---you can buy a utility stock and make an easy 5% and buy and sell it multple times a day for $8 a trade for virtually unlimited numbers of shares (transaction costs approaching zero). 
« Last Edit: June 06, 2016, 05:33:54 AM by sommers »