LendingClub, the online lender, saw its stock tank Thursday (Dec. 7) after raising its loss estimate and slashing its revenue forecast for the current fourth quarter.
Shares of LendingClub dropped 22.6 percent, making it one of the top losing stocks on the New York Stock Exchange on Thursday (Dec. 7). The company said its revenue expectation is now between $155 million and $160 million, which is lower than its past estimate of $158 million to $163 million, reported Reuters.
The online lender’s net loss is now forecasted to be between $6 million and $10 million, wider than the $3 million to $7 million it had previously projected.
During an event at Morgan Stanley, LendingClub‘s CEO, Scott Sanborn, tried to sell the company’s story to investors, focusing on what he said is a $350 billion market for debt consolidation and credit card refinancing in the U.S. alone, reported the Financial Times.
“The last 18 months have been among the most challenging of my career, but my conviction has never wavered: consumer credit is a data problem that a technology-driven marketplace is well positioned to solve,” he said. “That’s what drew me to LendingClub when it had less than 40 people, and what continues to excite me today.” The speech didn’t do much to assuage investors, who continued to sell off the stock in trading on Thursday (Dec. 7).
LendingClub has been trying to bounce back from an internal inquiry last year, in which the company was accused of filing false documents and selling $22 million of loans to investors. That resulted in founder Renaud Laplanche leaving the company, and online lending getting a bad rap.
More recently, payment company Square has entered the online lending space, sparking renewed interest in online lenders.