LendingClub looks to calm investor base
LendingClub is looking to calm its peer-to-peer investor base, according to an email.
Acting CEO Scott Sanborn's e-mail Thursday to people who had served as peer-to-peer lenders on the network comes as the fintech company has seen its stock plummet in the wake of the resignation of its previous CEO earlier this month.
"We've talked to hundreds of our investors — spanning individuals to financial advisors to banks to large institutions — over the past week about the strength of our business, our operations, our people, and our data integrity," Sanborn wrote. "Let me assure you that we are in a strong financial position with a substantial amount of cash and securities on our balance sheet — $868 million. We plan to be around for many years to come."
Still, LendingClub's loan investors "may not receive full amount of payments due" or could see delayed payments if the company goes out of business, according to its website. The site notes that LendingClub has a successor servicing agreement with a third party in the event that it goes out of business.
LendingClub did not comment when contacted by CNBC.com. The company's shares are down more than 60 percent this year, though they were up 5 percent Friday afternoon.
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Performance of loans originated from LendingClub remains robust, Sanborn wrote in the email. However, reports emerged in the wake of former CEO Renaud Laplanche's resignation that institutional investors in the marketplace lender's loans were temporarily halting their buying.
LendingClub admits Laplanche has been a linchpin of the organization; others say he had come to be the face of the budding online lending industry. It makes his downfall, which came in early May as a result of his not disclosing a relationship with a hedge fund that invested in his company's loans, all the more difficult. The company is also reportedly subject to several investigations related to Laplanche's departure.
"The loss of the services of Mr. Laplanche, our other executive officers or members of our senior management team, and the process to replace any of them, would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives," the company said in its most recent 10-K filing.
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One of LendingClub's competitors, Prosper, states in filings that it has separated its businesses into Prosper Funding LLC and Prosper Management Inc., which the company says is aimed at protecting investors in the event of a bankruptcy filing.
"This organizational structure, along with the federal and state registration process, is expensive and time consuming to undertake, and is not easily duplicated by competitors," Prosper said in a federal filing.
Prosper did not comment when contacted by CNBC.com
— CNBC.com's Ari Levy contributed to this report.