LendingClub (NYSE:LC), the only pure-play digital bank that is publicly traded, is bouncing along its 52-week low as its shares troll under $6. Of course, the market is sinking today across the board as the reality of longer for higher sinks in. That – and the fact the US government will need to service its massive debt at a much higher cost to the country – probably crowding out other opportunities. You get the government you vote for, I guess.
LendingClub may be highlighted as a Fintech that went public too soon. A year ago, LendingClub’s shares traded at almost $12, so about a 50% haircut today. But if you like pain, when LendingClub floated its shares eons ago in 2014 it sold them to the public at $15 each. That doesn’t sound that bad until you consider the reverse stock split the company decided to pursue. According to Yahoo, the all-time high of LC stands at over $120/share.
The challenging economy has hit the “Marketplace” digital bank hard as it attempts to re-invigorate growth just as the consumer is cutting back and interest rates slow the economy. LendingClub’s strategy entails. “empowering” their users to meet their personal financial goals by providing access to a broad range of financial products, and educational resources. But LendingClub will need to expand services as a growing number of consumers want more in a digital bank instead of less as they consolidate their financial existence in fewer Apps instead of many. More offerings could help drive more users and boost the Fintech.
For investors that participated in the public offering and still are long the digital bank, the ride looks more gloomy as it is a long way back to a $9 billion valuation from the company’s ~ $620 million valuation today.