Lending Club second quarter earnings reveal further financial hurt

 
Oliver Gill
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The departure of founder and former chief exec Renaud Laplanche has undermined confidence in the peer-to-peer lender (Source: Getty)

Being the first company to tap into a new market often is hugely advantageous. For Lending Club this has been anything but the case as second quarter results released overnight indicate.


The peer-to-peer lender widened its losses from $4m (£3m) to $81m, its loss per share was nine cents – worse than analysts expected – and Carrie Dolan, the company's finance chief, resigned. Dolan's resignation comes just three months after former chief executive and company founder Renaud Laplanche left his post.

Read more: Is Lending Club's founder's resignation the beginning of the end for P2P?

After being floated at $15 per share in December 2014, initial optimism from the stock market was replaced with scepticism with the share price sliding at the end of 2015.

Laplanche's untimely departure predicated a further run on the stock and after a month of stability in June – underpinned by the revival of negotiations with Jefferies on a bond deal – the overnight news has led to shares changing hands for just under $4.60.


Lending Club was the first peer-to-peer lender to register its offerings with the SEC but the allegations of loan misconduct against Laplanche led to experts questioning whether the San Francisco-based company had a future.

Chief executive Scott Sanborn made reference to "the unusual disruption to our supply of capital in May" in his commentary on the second quarter numbers.

However, he remained steadfastly confident about the future.

“Our efforts to reengage investors are working, with fifteen of our top twenty largest investors back on the platform today," he said.

Read more: Lending Club flotation: It's good news and bad news

Originations were slightly up – $1.96bn from $1.91bn taking the total loans originated since inception to $21bn.

Guidance for the third quarter was for operating revenue in the range of $95m to $105m and adjusted losses in the range of $15m to $30m.

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