Alternative Finances

Lending Club Site Hiccup Causes Investor Worry

A testament to just how difficult and uncertain the Lending Club situation has been of late — a slight hiccup in the marketplace lender’s website last night caused some pretty big worries, as investors were suddenly concerned the end had come.

One nervous investor tweeted out his concern that “[a]s a long-time investor there, I am worried that they have closed down.”

Calls placed to customer service didn’t yield much past the normal suggestion that customer service closed at 5 p.m. PST and to please call back the next day.

Lending Club, however, clearly noticed it was making people nervous and tweeted that it was in the midst of resolving a data center outage.

“We’re working to resolve a data center outage & our website is currently down. Sorry for any inconvenience- we’ll be back up & running soon!”

The outage was oddly timed, to say the least. Reports earlier in the day had indicated that departed CEO Renaud Laplanche might be working out a plan with investors to retake his firm. The Laplanche revelation came in tandem with the news that Lending Club’s second-largest shareholder had unloaded all of its stock and that the firm’s annual investor meeting was to be put off for two weeks.

But of course, the firm is ailing because of reasons directly connected to Laplanche, who an internal investigation connected to falsified loan documents and a failure to disclose personal holdings before a major Lending Club investment.

The situation is a bit of a mess, which is likely why investors got so jumpy when the site went down. Luckily for all, by 9:30 p.m. EST, the situation had been resolved, and LC was back online. It was still online at 6:30 this morning.

But come around 7 a.m. — it’s back down again.

What’s next?

Some think that, whether or not Laplanche can overcome his specific issues, it is seeming that Lending Club is increasingly likely to be acquired. At its IPO, the firm was worth $9 billion; that value, as of today, is less than $2 billion.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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