Author Topic: Prosper Originations Continue To Be Extremely Low  (Read 3775 times)

Xenon481

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Prosper Originations Continue To Be Extremely Low
« on: February 28, 2013, 10:04:57 PM »
Even with Worth-Blanket2 back in the game, Prosper's origination rate continues to be extremely low compared to historical numbers:

http://www.prosper.com/invest/performance.aspx

$ of Loans Originated (by month originated):

Jan 2011: $3,301,421
Feb 2011: $3,656,521
Mar 2011: $4,513,931
Apr 2011: $5,013,591
May 2011: $5,600,451
Jun 2011: $5,606,303
Jul 2011: $6,004,565
Aug 2011: $6,869,661
Sep 2011: $7,361,183
Oct 2011: $8,706,068
Nov 2011: $9,003,672
Dec 2011: $9,500,643
Jan 2012: $10,826,709
Feb 2012: $11,001,656
Mar 2012: $11,235,816
Apr 2012: $11,644,207
May 2012: $12,810,214
Jun 2012: $13,555,137
Jul 2012: $14,925,140
Aug 2012: $14,309,578
Sep 2012: $15,839,746
Oct 2012: $15,332,861
Nov 2012: $12,086,224
Dec 2012: $9,607,832
Jan 2013: $9,821,395
Feb 2013: $9,008,608


February 2013 is the lowest month for originations that Prosper has had since November of 2011.


Prosper's primary revenue stream is from taking a percentage cut of all originations, so this kind of massive extended cut in originations rate is going to have a huge negative impact to Prosper's top line revenue numbers for 2012 Q4 and 2013 Q1.
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Xenon481

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Re: Prosper Originations Continue To Be Extremely Low
« Reply #1 on: February 28, 2013, 10:26:17 PM »
http://www.sec.gov/Archives/edgar/data/1416265/000114036112046004/form10q.htm

Per Prosper's 2012 Q3 SEC 10-Q quarterly financials filing, they averaged ~4.5% of total originations as their originations fees revenue source across the first 3 quarters of 2012.

Originations Fees Revenue:

2012 Q1: $1,382,455
2012 Q2: $1,756,891
2012 Q3: $2,083,196

Extrapolating out the ~4.5% to 2012 Q4 gives an approximate $1,666,000 originations revenue. This puts 2012 Q4 top-line revenue significantly down from 2012 Q3 which had a net operating loss of ~$4million.

We are only two months into 2013 Q1, but even if we estimate March originations at ~$10million (higher than any of the past 3 months), that still extrapolates to an estimated 2013 Q1 top-line originations fee revenue of just ~$1,300,000.
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DanB

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Re: Prosper Originations Continue To Be Extremely Low
« Reply #2 on: March 01, 2013, 04:45:43 AM »
Of course it is almost a certainty that March numbers are going to be at the $10 million you've cited.................& possibly substantially higher in the $12-13 million range. 

Xenon481

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Re: Prosper Originations Continue To Be Extremely Low
« Reply #3 on: March 01, 2013, 08:35:43 AM »
Of course it is almost a certainty that March numbers are going to be at the $10 million you've cited.................& possibly substantially higher in the $12-13 million range.

Do you have any evidence to support that claim? I'm not saying it will or won't, I'm just providing Prosper's own published numbers.

December 2012 Business Days: 20    Average Daily Origination Rate: ~$480k/day
January 2013 Business Days: 21    Average Daily Origination Rate: ~$468k/day
February 2013 Business Days: 19    Average Daily Origination Rate: ~$474k/day

The average daily origination rate has been fairly stable over the past 3 months regardless of the fact that Worth-Blanket2 re-entered the market in late January.

March of 2013 has 21 business days just like January of 2013.

If the daily origination rate continues to average around $474k/day like it has for the past three months, then an estimate for March 2013 would be ~$9.95million.  If the daily origination rate averages closer to ~$500k/day (a 5.5% increase over the rolling 3-month average), then March 2013 originations would be on the order of ~$10.5million (in the approximate range of my original estimate). Even a full 10% increase in the average daily origination rate to ~$521k/day wouldn't even break ~$11million ($10.9million).

In order to reach $12million in originations, Prosper would need to average ~21% higher daily origination volume this month than they have the past 3 months. To reach $13million, they'd need to average ~31% higher.

For comparison, the largest month-over-month origination growth rate that Prosper had in all of 2012 was ~10.6%.


Also, even if the $12-13million range ends up being correct, that would still put 2013 Q1 origination fees revenues ~20% lower than 2012 Q3 numbers (the most recently available from the SEC).
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Peter

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Re: Prosper Originations Continue To Be Extremely Low
« Reply #4 on: March 01, 2013, 03:44:50 PM »
BTW, Worth-blanket2 actually came back on to Prosper on Feb 6th. And if you look at their pending activity they have several hundred thousand dollars in pending investments.

I originally thought March was going to be around $15 million in originations but I realize that is a little optimistic even for a polyanna like me. I agree with Dan that it will be in the $12-$13 million range and then April should be in the $15-16 million range.

I have had contact with several institutional investors in the last month who have expressed a desire to start investing on the Prosper platform. This is what I based my optimistic projections on.
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