A Kandinsky-esque picture: the evolution of Risk to Reward on Lending Club
We think a lot of about risk versus return. Recently, we looked in to the evolution of risk to return on Lending Club.
- Stephen Zentner
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We think a lot of about risk versus return. Recently, we looked in to the evolution of risk to return on Lending Club.
The main offices of both Lending Club and Uber may be mere blocks away from each other in San Francisco, but the modus operandi of the two tech companies are worlds apart. Uber has expanded hyper-aggressively, consciously making the decision to sacrifice rule-following for the sake of growth. Meanwhile Lending Club has, for the most part, eschewed the typical Silicon Valley mantra of ‘move fast and break things’ for a more conciliatory approach.
Thanks to the JOBs act, which introduced Rule 506(c) to Regulation D, we are allowed to share some of LendingRobot Series’ data publicly.
There are 6 numbers to describe 2016 and we list them. Enjoy!
On the call and in the slides, Lending Club stated that “all large investors have reengaged on the platform.” As seen in the chart below, it does appear that these investors have reengaged. But what wasn’t highlighted is that a single institutional investor made up a …
A \$20,000 portfolio split evenly between Lending Club stock and in Lending Club notes at the company’s IPO in 2014 would be worth \$14,188 today. The notes would have a value of \$11,607, while the Lending Club stock would be valued at \$2,581. That’s not the end of the story, though.
Lending Club has guided investors that there will be 0% growth in originations from the second quarter. The company has stated that they expect a \$15-\$30 million loss. This number may be optimistic.
Today we introduced a new product which connects to Lending Club, called LendingRobot For Advisors.
*Note: This Infographic is intended for informational purposes only. Your specific situation may differ.
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