Seeking Alpha

WSJ: Lending Club hires banks for IPO

  • The WSJ reports Lending Club, owner of a fast-growing P2P lending platform, has hired Goldman and Morgan Stanley (among other banks) to take it public. An offering could arrive by year's end.
  • Lending Club was valued at $3.75B in a recent funding round, after getting valued at just $2.3B in a round last year. The company has handled over $4B worth of personal loans (both from individuals and financial firms) over its lifetime, and is looking to expand into additional types of credit.
  • This spring, Lending Club bought Springstone Financial, an issuer of loans meant to help parents pay for private school tuition, for $140M.
  • Google reportedly took an 8% stake in Lending Club last year.
Comments (10)
  • caupachow
    , contributor
    Comments (330) | Send Message
     
    I earn a steady 11% on my money using LC since June 2011. They make it really simple with the "Automated Investing."
    28 Jun, 10:43 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (831) | Send Message
     
    what settings or types types of loans do you go for? I had high defaults with poorly rated loans and reverted to only A/B grades. My return is less than 8%. I only have few thousand in there and decided to stopped funding and am slowly taking money out.
    28 Jun, 10:53 AM Reply Like
  • Baboon
    , contributor
    Comments (449) | Send Message
     
    You might want to shoot for the loans in the range of 13-15% rate.
    28 Jun, 03:43 PM Reply Like
  • caupachow
    , contributor
    Comments (330) | Send Message
     
    Only c through g loans and to mitigate the defaults one needs some where over 800 loans. I started with $5,000 and have put a considerable amount in since June of 2012. My NAR with them right now is 11.85%.
    30 Jun, 09:40 AM Reply Like
  • wbrady7
    , contributor
    Comments (4) | Send Message
     
    Thank you caupachow.
    28 Jun, 11:13 AM Reply Like
  • LeveragedSpeculator
    , contributor
    Comments (2) | Send Message
     
    I too am slowly taking money out of LC after trying it out for a few years. The problem is with non-tax advantaged (regular) accounts: charge offs are counted as capital losses and capped at 3k/year whereas interest is treated as ordinary income and regular income tax rates apply. Once run through the tax grinder LC is not as great as it seems, and after you consider the lack of liquidity..
    29 Jun, 07:48 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    LevSpec,

     

    What you describe is not unique to LC. You would experience this situation with any other portfolio that generates capital losses and interest income, i.e. a corporate bond portfolio. They are treated separately for tax purposes.

     

    I have been using LC since March and am earning around 8% annualized so far. Like picking stocks or distressed debt, I have my own system for selecting which loan notes to invest in.

     

    LC is pretty much eBay meets online banking. I love the concept.
    29 Jun, 08:54 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (831) | Send Message
     
    LC is also now overrun by automated large scale investors. I get feeling that you need to be totally automated or else get to pick over junk.
    29 Jun, 11:21 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    You can still find opportunities if you are patient. Also depends on your risk tolerance. I don't mind the risker notes, if they are priced right.
    29 Jun, 06:18 PM Reply Like
  • Joseph11
    , contributor
    Comments (10) | Send Message
     
    I've been using LC for 3 years and have generated a return of 8.3%. Not great but much, much better than what a bank is offering on a CD or even a 10 year Treasury. My experience has been to stay with the A/B/C loans as the charge-offs in the D/E/F/G loans are too high.
    29 Jun, 12:16 PM Reply Like
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