Lending Club is a fairly easy way to get an 8%+ return on your money, and it works. So why after using it for 2 years am I closing my Lending Club account and not buying shares at $10 a piece?
Although my main reason is a new found personal aversion towards all types of debt, there are other reasons that the market currently recognizes as well.
-Most of the investors are no longer individual peers they are retail investors
-Lending Club is still growing but they're mainly growing through issuing new loans and still does not have much profitability margin
- Lending Club has not had any major innovations or done any acquisitions or anything majorly improved outside of scaling the same idea
Overall I do think the initial idea of peer to peer lending using the internet is still a genuine innovation and can improve how things are done. Unfortunately the idea has been forcefully demanded to grow far too soon to keep up with general market expectations and is trying to force in old institutional investor into still new ideas. While Lending Club will likely still survive and grow, I think it is at its best as an innovative company in the financial industry and won't do its best work by continuing to try exponentially increasing its loan portfolio using institutional investors. While it may continue to grow I am still choosing not to buy stock even at this lower than IPO price.