Lending Club Reported Earnings and They’re a Fucking Disaster

Good news Union Square Venture lovers: it appears the President and CEO of woefully managed, world ending disaster in the making and example of how NOT to manage a financial institution, Fannie Mae, will be added to the Lending Club board of morons. Hopefully, he will guide this company directly into the abyss.

Bear in mind, this is an easy to follow trend in tech. Find any company who was financed by a venture capital fund, like Union Square (hello Uncle Fred!) and sell it down short, until it dies. The delicious paradigm we’re in today is bereft of opportunity, because of all the private money floating around in search for the next Groupon. When I started the business in the late 90’s, this wasn’t the case. You could buy companies before they were priced out of their fucking minds. All of the really good companies are private, from Uber to Airbnb. The only way this ends is for the venture capital world of baby blood drinking, bizarre fucking vampires, to blow up in a giant cloud of thermo-nuclear ash–created by the detonation of a financial tsar bomba.

Unfortunately, I don’t see any tsar bombas on the horizon. In the meantime, you will have to endure.

• Reports Q2 (Jun) loss of $0.09 per share, $0.07 worse than the Capital IQ Consensus of ($0.02); revenues rose 6.5% year/year to $102.39 mln vs the $100.42 mln Capital IQ Consensus.
• Loan originations in the second quarter of 2016 were $1.96 billion, compared to $1.91 billion in the same period last year, an increase of 2% year-over-year. The Lending Club platform has now facilitated loans totaling nearly $21 billion since inception.
  • Quarter developments:
    • In light of lower loan volumes in the second quarter and recognizing that the full scale return of investors may take time, in June 2016, the company eliminated 179 positions in the organization
    • Lending Club ended the quarter with strong liquidity including $832 million in cash, equivalents and available for sale securities, and $120 million of undrawn credit facility
    • Jefferies successfully executed a three times oversubscribed near prime securitization in August 2016 for $134 million of unsecured Lending Club personal loans
• Co issues downside guidance for Q3, sees Q3 revs of $95-105 mln vs. $108.45 mln Capital IQ Consensus Estimate; sees Adj-EBITDA of ($30-15 mln)
• Lending Club announced that Carrie Dolan resigned from her role as CFO to pursue a new opportunity. In response, Lending Club has appointed Bradley Coleman to Principal Accounting Officer and Interim CFO. Mr. Coleman has served as Lending Club’s corporate controller since 2013 and will continue in that role while fulfilling his new duties. The company has retained a global executive search firm to manage the recruitment of a new CFO and expects to name a successor in due course.
• Timothy J. Mayopoulos, President and CEO of Fannie Mae, has been appointed to the Lending Club Board as an independent Director. In addition, the company has successfully hired a Head of Institutional Investors, which will be formally announced soon.

Lending Club, the wonderful innovator of the FINtech world, is down 65% over the past year and -5% in the after hours.