LendingClub (NYSE:LC) shares hit a six-month high today rising over 9% to close at $7.48 each. The strong performance came on day when markets were slightly green overall but alongside no news for the Fintech. LendingClub has not traded above this level since last April.
Earlier this month, LendingClub reported Q3 numbers that were down versus the year prior – largely due to the ongoing COVID health crisis. LendingClub’s net revenue was reported at $74.7 million, down 64% year-over-year but improving by 70% versus the prior quarter. The company said that loan originations were recovering but they still have a long way to go to regain its traction pre-COVID.
LendingClub is in the process of transforming from an online lending platform to a full-stack digital bank. The company is in the process of acquiring Radius Bank, an acquisition that is reportedly on track. While LendingClub probably could start offering certain banking services beyond its online lending core service it appears to be waiting to close on the transaction before it morphs into a bank and moves further away from its peer to peer lending origins.
So why is LendingClub on the rise? It’s a good question and one that’s hard to answer but buyers are obviously pushing the price higher. Part of it may be from firms like
ARK Investment Management LLC, an investment management firm looking to invest in the “next big thing,” revealed a 10.47% stake in LendingClub in October. Perhaps there are other investors coming around to their perspective.
Regardless, LendingClub has a long way to go to make it back to its 52 week high, much less to the share price it hit soon after it IPO’ed several years ago. Last January, LendingClub was trading around $13/share. Perhaps once LendingClub becomes a bank it will generate stronger investor interest.