Anyone else going to try to pick up some shares? Starts trading tomorrow on the New York Stock Exchange under ticker symbol LC. There's quite a bit of demand for this too.
IPO will be priced at $15. These P2P lenders are slowly eating into the traditional banks lending business.
Think of these guys like eBay. But instead of selling toys, clothes, etc., they're selling money.
Lending Club IPO: Finance Business Gets Tech-Stock Allure - WSJ
P2P lending stocks offer rewards ... and risks
More info on Lending Club:
IPO will be priced at $15. These P2P lenders are slowly eating into the traditional banks lending business.
Think of these guys like eBay. But instead of selling toys, clothes, etc., they're selling money.
Lending Club IPO: Finance Business Gets Tech-Stock Allure - WSJ
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Lending Club IPO: Finance Business Gets Tech-Stock Allure Lending Club raised $870 million Wednesday, according to people familiar with the matter. It priced its IPO at $15 a shareabove the expected range of $12 to $14 a share, the people said. It also added 300,000 more shares to the offering, bringing it to 58 million, one of the people said. At that price, the companys market value would stand at $5.4 billion, excluding stock options. The shares are set to begin trading Thursday on the New York Stock Exchange under the symbol LC. Investors applied for enough shares to cover the deal 20 times over, people familiar with the IPO said. If the banks underwriting the deal exercise an option to buy more stock from Lending Club to cover excess demand, the offering could reach $1 billion. Helping to fuel the rush for the offering: an unusually large allotment of 6.6 million shares for lenders on its platform, as well as employees and other people close to the company. That would be the biggest direct offering for any IPO raising less than $2 billion in at least a decade, according to Ipreo, a market-intelligence firm. The company faces a number of risks, analysts say, including competition from banks and other startups, credit quality and regulatory hurdles. But many prospective investors see the IPO as a way into the booming business of alternative lending. Lending Club is among the biggest online platforms where consumers and small businesses can borrow money without going to a bank. Were talking about originating loans. That process has been the same for hundreds of years, said Michael Mattioli, senior analyst at John Hancock Asset Management, which is considering buying shares in the IPO. Youre disrupting a sector that really hasnt gone through a lot of change. Lending Club doesnt lend money itself. Instead, it connects borrowers with lenders for a fee. The company had revenue, after interest expenses, of $143 million through the first nine months of 2014, a gain of 122% from the same period last year. It loses money$24 million this year through Septemberafter hefty investments in its businesses, including $23 million this year on product development and $61 million on sales and marketing. Some analysts at banks underwriting the IPO estimate revenue will vault to roughly $800 million in 2017, with a profit in the range of $150 million, according to people familiar with the deal. At $15 a share, that would mean Lending Club is valued at well over 35 times those earnings, the people said. Such a valuation is more in line with Internet companies, such as Alibaba Group Holding Ltd. , Facebook Inc. or Yelp Inc., than with firms that facilitate financial transactions, such as MasterCard Inc. and Visa Inc., according to FactSet. One risk Lending Club faces is that loans on its platform tend to be riskier than those of many credit-card lenders, which constitute its chief competition for consumer borrowers. If the economy slows and more borrowers default, investors who lend on its platform will likely increase rates charged to borrowerspotentially slowing activity on the platform and leading to less fee income for Lending Club. Only about 35% of the loans made through Lending Club are to the highest tier of borrowersthose with credit scores above 720. By comparison, 56% of loans made by the average credit-card issuers are to such borrowers. Lending Clubs median loan was larger, around $15,000, than the typical credit-card issuer, about $10,000. |
P2P lending stocks offer rewards ... and risks
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P2P lending stocks offer rewards ... and risks On Wednesday night, LendingClub, the largest peer-to-peer lending service, is seeking to price 57.7 million shares at $12 to $14 a share, which is up from $10 to $12 just two days ago. Peer-to-peer lending has grown dramatically in the past few years as consumers and small-business owners are using it to bypass traditional lenders like banks. Since LendingClub launched in 2007, it has facilitated more than $5 billion in loans, including more than $1 billion in the second quarter of 2014. That's growth. And it's turning profitable. LendingClub's competitors, of course, are banks, but in many cases they are hamstrung by regulations. The flip side is equally interesting; investors use LendingClub to earn returns. I've seen considerable interest in investing in peer-to-peer lending platforms as an alternative to, say, high-yield investments. The downside is that should the consumers whose loans you are investing in default, you have very little recourse. For personal loans, you do not have a claim on any assets, so you can get burned if the economy suddenly turns down. Consumers like peer-to-peer lending because they can consolidate higher interest rate credit card debt. Investors like it because there is a wide range of investments and returns; it could be anywhere from 7 to 30 percent, depending on the risk profile. LendingClub gets a fee on the loan origination, and it sells off the loan. This is the first of a number of peer-to-peer lending companies likely to go public. A second lender, On Deck Capital, is scheduled to price next week. But it makes mostly small-business loans and usually holds them. |
More info on Lending Club:
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What We Do Lending Club opened in 2007 with one simple mission: create a more efficient, transparent and customer-friendly alternative to the traditional banking system that offers creditworthy borrowers lower interest rates and investors better returns. We operate fully online with no branch infrastructure, and use technology to lower cost and deliver an amazing experience. Today, we're America's leading online credit marketplace, and we're radically changing the way lending operates - every day. The Lending Club experience is liberating
Latest Company Stats as of 09/30/14
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