Author Topic: Earth to Lending Academy Forum, Over?  (Read 5274 times)

Rob L

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Earth to Lending Academy Forum, Over?
« on: August 08, 2018, 09:11:40 PM »
LC announced their quarterly earnings after the close yesterday. The market wasn't impressed. Their stock dropped 10% today.
Plus the following revelation quoted from Market Watch:

"LendingClub Corp. (lc) disclosed a Massachusetts investigation into its advertising and disclosure practices Thursday, sending shares down in after-hours trading following a rough regular session. In its quarterly filing with the Securities and Exchange Commission, the online lender said that it had received a civil investigative demand from the Massachusetts attorney general in June. The company also noted that it had "responded to inquiries from the California Department of Business Oversight and the New York Department of Financial Services regarding the operation of the company's business and the overall 'FinTech' industry." LendingClub did not disclose the investigations in its earnings report nor in its related conference call Tuesday afternoon."

Just saying, most of the discussion on this forum has been about LC and nobody saw fit to post this news?
As I've made well known I'm "already gone". What do I care? For anyone that isn't already gone this is at least interesting, no?
Conclusion; nobody posts, maybe everyone's already gone.


dr.everett

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Re: Earth to Lending Academy Forum, Over?
« Reply #1 on: August 08, 2018, 09:24:33 PM »
I'm still here- sold my LC stock before the drop- missed out on selling earlier so I left some money on the table. However I'm happy to watch over the next few days, see if it drops any more, and then buy back in for the 10-20% run up before the next earnings.

Figure if I can hit the cycle a few times I'll be happy. Just need to pay a bit more attention than last time, set some sell triggers, and trust my gut a bit more.

Got something else to post shortly that came from LC.

Fred93

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Re: Earth to Lending Academy Forum, Over?
« Reply #2 on: August 08, 2018, 11:11:11 PM »
LC announced their quarterly earnings after the close yesterday. The market wasn't impressed. Their stock dropped 10% today.

Yawn.  Wake me up when they report a good profit.

Quote
"LendingClub Corp. (lc) disclosed a Massachusetts investigation into its advertising and disclosure practices ...

Probably just the ordinary stuff one has to deal with when one is in business.  My business (very different industry) always has various ongoing things like this, so I don't particularly consider this "news" either.

Quote
Just saying, most of the discussion on this forum has been about LC and nobody saw fit to post this news?

Not true.  Someone did post it: You!

I was thinking of posting about the earnings, but I didn't see anything exciting, so I spent the evening doing something else.  The really strange thing is that they reported a loss mostly because they let expenses grow so much this quarter.  Every category of expenses grew.  What's up with that? 

Fred93

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Re: Earth to Lending Academy Forum, Over?
« Reply #3 on: August 09, 2018, 04:10:15 PM »
My prior response missed a few things... This quarter had a $12.6M class action settlement and a $35.6M goodwill impairment in it.  Those are pretty big items.  If we subtract those out, after which LC only lost $13M this quarter.

Ok, so subtracting out the possibly one-time stuff, the ongoing business lost less than it lost last quarter.

Thing is ... LC is 10 years old.  The ongoing business should be profitable by now. 

Rob L

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Re: Earth to Lending Academy Forum, Over?
« Reply #4 on: August 09, 2018, 08:07:29 PM »
My prior response missed a few things... This quarter had a $12.6M class action settlement and a $35.6M goodwill impairment in it.  Those are pretty big items.  If we subtract those out, after which LC only lost $13M this quarter.

Ok, so subtracting out the possibly one-time stuff, the ongoing business lost less than it lost last quarter.

Thing is ... LC is 10 years old.  The ongoing business should be profitable by now.

Yeah, ya think!
Bottom line I think LC's halcyon was a byproduct of the great recession (ZIRP, QE 1,2,..). Banks were just not lending then.
I don't think banks in general are incredibly stupid nor digitally impaired and they are lending now.
The LC business model in ZIRP/QE times was spot on. Now, not so much.
Now everybody's getting into the act.


AnilG

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Re: Earth to Lending Academy Forum, Over?
« Reply #5 on: August 09, 2018, 11:59:58 PM »
Lending is cyclical and runs somewhat counter to economy and stock market. Banks and institutions are like sheep herd. Good times everybody enters slowly, bad times everybody rushes out quickly. As soon as few of them slow down/stop lending, everyone will rush to exit. Above average returns in lending comes from lending when fewer are lending.

LC just needs to be patient and stay on track. They need to introduce breadth (both duration and types) of credit products. I am hoping that recent rise in expenses is result of LC gearing up for implementing medium/longer term growth strategies rather than continuing to focus on survival in the short term.

Yeah, ya think!
Bottom line I think LC's halcyon was a byproduct of the great recession (ZIRP, QE 1,2,..). Banks were just not lending then.
I don't think banks in general are incredibly stupid nor digitally impaired and they are lending now.
The LC business model in ZIRP/QE times was spot on. Now, not so much.
Now everybody's getting into the act.
---
Anil Gupta
PeerCube Thoughts blog https://www.peercube.com/blog
PeerCube https://www.peercube.com

rawraw

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Re: Earth to Lending Academy Forum, Over?
« Reply #6 on: August 10, 2018, 08:29:56 AM »
While I agree with the above, banks that earn outsized returns are also the low cost provider typically. LC may need to focus a bit on that

MoMoney

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Re: Earth to Lending Academy Forum, Over?
« Reply #7 on: August 10, 2018, 05:20:40 PM »
I'm planning to start a post about the earning in a few days but generally I couldn't have been happier with the earning and the subsequent price drop. I am happy that I was able to accumulate more shares at cheap prices after seeing the amazing progress the company has made. They have been blowing past their own expectation in almost all categories. I think their full year guidance will be upped next quarter and they are on path be a profitable company in 2019 (I'm modeling at a minimum a $25 million profit for 2019). Adjusted EBIDTA of $75-$90 million already this year is amazing. The whole company is valued at around 700-800 mil when you subtract cash/assets. Almost all their legacy issues will be out of the way in 2018 too. Rising interest rate environment is good for them as it's driving more people to refinance but it also means they will gain more interest income and also will have an easier time finding investors that chase yield. Their scale is also helping them a lot and will only add added benefit. My conservative models give me a price of around $8. I think the stock is a steal at this price. There is risk too such as amazon entering the category or Marcus wanting to massively scale but I don't see that risk in near-term or mid-term. Mostly because Marcus has acknowledged a few times that they're planning to grow conservatively (and GS investors and CEO want that too)
« Last Edit: August 10, 2018, 05:25:38 PM by MoMoney »

dr.everett

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Re: Earth to Lending Academy Forum, Over?
« Reply #8 on: August 10, 2018, 10:59:46 PM »
... My conservative models give me a price of around $8...

I think I'd wet myself or something worse if I were to open my LC stock portfolio and see $8 a share.  :o
That would be a really happy day after I cleaned up.  8)

PennySaved

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Re: Earth to Lending Academy Forum, Over?
« Reply #9 on: August 26, 2018, 04:16:34 PM »
I would be happy if went to $8 per share.  I still have the 175 shares of LC that I bought during the IPO at $15 a share.  Kept them even after others sold when the price went as high as $27 and they made a nice profit.  I was hoping the price would go up over recent times but it has been dismal.  I did not sell and take tax loss (at this point about $2000 loss) because I already had close to $3000 loss from LC chargeoffs for 2017 and I did not want to get into carryover losses on my taxes.  I think my LC chargeoff losses may be on track for 2018 to be about $1500, but who knows.  That's with me stopping re-investing mid 2016 and taking withdrawals.  I have gone from about $50K in notes and still have $5k notes left.

Hey, but I filled out papers for the claim on the class action suit, and may see some money back from that. Wondering when that will be paid.   Mostly, I am depressed about the stock loss but I knew it was a gamble when I bought the shares.  Luckily, LC limited the amount of shares it would see retail investors during the IPO.


Fred93

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Re: Earth to Lending Academy Forum, Over?
« Reply #11 on: September 20, 2018, 04:05:28 PM »
https://www.equities.com/news/lendingclub-corporation-lc-soars-5-87-on-september-19

Worthless machine-generated article.  Never touched by human hands.  Contains no information.  The financial web pages are loaded with this nonsense.  This is a sad time for journalism.