Update on Lending Club, after Q2 Earning Report
Lending Club has recently released its earning report for Q2 2016. The result is worse than expected. The company lost -$0.09 per share for the quarter, revenue is at 102.4 mil.
Top Line: Revenue / Loan Origination Decrease
1. Origination reach $1,955 mil vs last quarter of $2,750 mil
2. The decrease resulted from reduced investment of banks and other institutions
Bottom line: Earnings, Expense
1. Total expense reduced from previous quarter of $83.1 mi to 68.3 mil
2. Expense increased to $64.2 mil from $42.9 mil from Q1 2016 to Q2 2016
Also, the company CFO announced departure. The stock reacted with initial disappointment, and right away stablize its footing and moved upward. For the last two weeks or so, the stock continue to move up with good volumes, now the $6.5 resistance level we identified back in May 10th 2016 is within reach.
I had visited Lending Club at their corporate headquarter in mid July. I believe that Lending Club is managing a turnaround from the current situation.
During my visit, I learned couple of internal changes in the area of: internal control, operation, credit model, business model, reducing staffing, hiring a Chief Capital Office to build confidence with institutional investors. As a result, 15 out of the 20 institutional investors had returned to Lending Club and buying loans.
I believe Lending Club as well as the P2P industry is in the midst of change, and these changes are for the better. The reduced staffing is expected to reflect in their earning somewhat in the 2nd quarter of 2017. The cash reserve of about $800+ mil in the book of Lending Club is also another factor I believe Lending Club has the financial resources to go forward with the turnaround.
We will continue to follow on the future development of Lending Club stock price, and will update you in the near future.
Daniel Wu, CEO
Pair Lending, LLC
Elevate Your Wealth
Disclosure: I personally own the stock, some of my clients also own the stock. Pair Lending has business relationship with Lending Club.
*Disclaimer: This information is for educational purpose only. Securities mentioned here is not for the purpose of recommendation, nor it has considered your individual financial situation.
- Please consult your investment advisor before investing. This website and blog is a publication of Pair Lending. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.
- All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Information on this website and blog do not involve the rendering of personalized investment advice.
- A professional advisor should be consulted before implementing any of the options presented.
- No content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.Information on this website and blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein.