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LendingClub Loan Demand Still Lagging?

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LendingClub Loan Demand Still Lagging?

In a weekly report to investors, LendingClub Corp(NYSE: LC) revealed a substantial increase in the purchasing of loans on its platform.

Weekly Sales Numbers, Blunder And Revision

The Wall Street Journal reported recently the lender’s revision of weekly numbers that failed to fully reflect their own participation, calling it a “mistake.”

The revision clarified the company purchased $7.2 million of the notes themselves the last week of May.

Related Link: LendingClub Upside Likely, According To Investor Survey

The weekly sales number has become increasingly important to investors after transparency and internal control issues surfaced, causing some to question the company’s ability to continue to attract investors.

The Issue Of Holding Loans

Analysts at Craig-Hallum said LendingClub is buying more loans in order to speed up user experience. Investors purchase portions of the entire loan, but must wait until the entire loan is funded before they can begin to earn interest. LendingClub cuts the wait time by helping to fully fund loans.

However, WSJ pointed out that holding the loans, even for a short time, creates new valuation issues. Holding an increased amount of the loans means holding increasing amounts of risk. Previously, the company had no significant exposure to the actual performance of the loans.

A recent AlphaWise survey shows the majority of respondents cited the intention to increase investments at LendingClub.

LendingClub shares traded up 6 percent at $4.69 midday on Wednesday.

Latest Ratings for LC

DateFirmActionFromTo
Jul 2020OppenheimerDowngradesOutperformPerform
May 2020UBSMaintainsNeutral
May 2020Keefe, Bruyette & WoodsMaintainsMarket Perform

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