Author Topic: Lending Club - Time to panic?  (Read 80021 times)

sisto

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Re: Lending Club - Time to panic?
« Reply #350 on: September 07, 2018, 11:36:21 AM »
I should have all of my stuff resolved in about 2.5 years so right before I FIRE all my money should be free from LC. Just logged in and I have $443 available, I usually like to have around $500 and then cash out and buy some VTSAX.

ChpBstrd

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Re: Lending Club - Time to panic?
« Reply #351 on: September 17, 2018, 02:08:22 PM »
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
I'm checking in on the performance of my synthetic short idea from December 6th.

Last put price 1.55
Last call price 0.91
----------------------
Current profit: 0.64

Assuming you had to deposit 100% margin ($4.50/share) for the short call, that's an ROI of 14.2% since December 6th. Multiply by roughly three to annualize that! Interestingly, most of the profit came from deterioration of the call.

Today the call is worth 0.53 and the put is worth 1.45. Factor in the 0.08 received upfront to enter the trade and you'd be up $1 per share. In that time, the share price dropped about 84 cents.

It might still be a good deal to short LC. Options expiring in 2021 are now available, plus several reliable recession indicators are now in the red zone. However, someone might still acquire LC for a premium. High risks and high rewards...

chasesfish

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Re: Lending Club - Time to panic?
« Reply #352 on: September 17, 2018, 06:36:09 PM »
I think this company is going to zero, but still pretty negative on my $2.50 put options for Jan 2019 and Jan 2020.  I can't see how a company providing a negative return to its investors and lying about returns can survive

MrUpwardlyMobile

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Re: Lending Club - Time to panic?
« Reply #353 on: September 29, 2018, 05:40:44 AM »
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

OrchardTree

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Re: Lending Club - Time to panic?
« Reply #354 on: September 29, 2018, 08:17:24 AM »
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #355 on: September 29, 2018, 10:59:37 AM »
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?

Well if the loans won't be paid back and the business still can't make a profit, it's a worthless company.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #356 on: September 30, 2018, 06:52:14 AM »
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?

It can't make a profit...its operating costs exceed servicing fees it receives on loans.

If the loans its selling to investors are garbage and the portfolio is declining, they make less in servicing fees.  No money to pay people and IT.  Company bankrupt.

FireLane

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Re: Lending Club - Time to panic?
« Reply #357 on: October 01, 2018, 05:43:59 AM »
I have about $8K left in Lending Club that I'm withdrawing as repayments trickle in, to the tune of a few hundred bucks a month. At this point, I'm just hoping they survive long enough for me to get all my money out.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #358 on: October 01, 2018, 06:08:40 AM »
I have about $8K left in Lending Club that I'm withdrawing as repayments trickle in, to the tune of a few hundred bucks a month. At this point, I'm just hoping they survive long enough for me to get all my money out.

This was me last year.  I ended up listing all notes someone would pay me the principal balance plus 1% and got $7500 or so back

chaskavitch

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Re: Lending Club - Time to panic?
« Reply #359 on: October 01, 2018, 06:37:53 AM »
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #360 on: October 01, 2018, 06:46:07 AM »
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I've been selling off somewhat successfully. I'm fine with taking a 5% discount though. I have about $600 left in LC notes, but I see I get about $2-3 per month on recoveries...

WonderfulLife43

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Re: Lending Club - Time to panic?
« Reply #361 on: October 01, 2018, 01:51:22 PM »
Celebration time:  Withdrew my final $0.02 from LC today !!

DS

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Re: Lending Club - Time to panic?
« Reply #362 on: October 01, 2018, 01:54:43 PM »
Celebration time:  Withdrew my final $0.02 from LC today !!

Woohoo! Time to panic? :D

degrom7

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Re: Lending Club - Time to panic?
« Reply #363 on: October 01, 2018, 07:12:59 PM »
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Padonak

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Re: Lending Club - Time to panic?
« Reply #364 on: October 01, 2018, 07:16:15 PM »
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I have 3K and change left, also withdrawing funds regularly. Can't be bothered trying to sell notes.

marty998

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Re: Lending Club - Time to panic?
« Reply #365 on: October 02, 2018, 03:04:35 AM »
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....

chaskavitch

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Re: Lending Club - Time to panic?
« Reply #366 on: October 02, 2018, 06:22:18 AM »
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I have 3K and change left, also withdrawing funds regularly. Can't be bothered trying to sell notes.

I just put the 20 or so newest notes up at about a 2% discount.  If they don't sell, I'll increase the discount and see what happens.  I'm mostly trying to get as much out as I can in case they go completely under.

Syonyk

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Re: Lending Club - Time to panic?
« Reply #367 on: October 02, 2018, 08:42:33 AM »
I'm still not selling notes, but am not reinvesting and am pulling cash out. I need the money for next year's solar installation anyway.

I don't think them totally going under is likely, but I expect the note repayment will drop badly at some point. Hoping to be clear by then, but if I take a loss on the last notes, oh well.

degrom7

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Re: Lending Club - Time to panic?
« Reply #368 on: October 02, 2018, 08:17:45 PM »
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....

Yikes! What is the time frame for getting the notes paid? I've had the account for a month and only have earned $4.77.

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #369 on: October 03, 2018, 06:00:03 AM »
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....

Yikes! What is the time frame for getting the notes paid? I've had the account for a month and only have earned $4.77.

Well if you bought the notes all at the same time, the first payment is going to be until you hit about 1 month + 1-2 weeks. So give it a bit of time, it'll come in waves.

grettman

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Re: Lending Club - Time to panic?
« Reply #370 on: October 04, 2018, 05:15:27 AM »
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

MrUpwardlyMobile

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Re: Lending Club - Time to panic?
« Reply #371 on: October 04, 2018, 05:19:01 AM »
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

http://www.mrmoneymustache.com/the-lending-club-experiment/

He felt it was private welfare for responsible borrowers to offset deadbeats

chasesfish

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Re: Lending Club - Time to panic?
« Reply #372 on: October 05, 2018, 05:52:13 AM »
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

The praises were due to high referral/affiliate fees.  Those dried up, performance tanked, and praises stopped.

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #373 on: October 05, 2018, 08:11:09 AM »
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

The praises were due to high referral/affiliate fees.  Those dried up, performance tanked, and praises stopped.
Sure, that's the cynical view. The more optimistic outlook is that MMM legitimately thought it was an opportunity for another passive revenue stream. It did look pretty good at the start.

I'm not saying he didn't get affiliate revenue (he is very transparent about this). But when the performance tanked, he was transparent about that as well and no longer recommends LC. His original article is still up, with some in-line edits saying he doesn't recommend it anymore.

FireLane

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Re: Lending Club - Time to panic?
« Reply #374 on: October 05, 2018, 07:36:05 PM »
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

I invested with Lending Club because I want to be diversified and it seemed like a good idea to have one income source that wasn't stocks (here was my reasoning if you're curious).

Naturally, this was dependent on them delivering the return they promised. For a while, they did. But my rate of return started to sink in 2017 and never recovered. Either their risk model is bad or they've loosened their standards, and either way I've lost faith in them.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #375 on: October 06, 2018, 06:27:16 AM »
There's nothing more telling with Lending Club than pulling the YTD Performance on the right hand side of the statement:

Interest Earned:  $494.65
Late Fees:  $1.32
Loan Losses:  ($1,028.72)

Wowza

No wonder this company won't report YTD, 1 Year, 3 Year, and 5 Year Returns.  They continue to just report return since inception, which included 2011-2013 notes when this was a good idea.