LendingClub: Investors Should Hold on a Little Longer
The digital marketplace bank and online personal loan company LendingClub (NYSE: LC) recently reported third-quarter earnings results that beat expectations. Despite the solid performance, the stock sold off anyway as the company reported lower guidance for the fourth quarter.
When LendingClub completed its acquisition of Radius Bank early in 2021, effectively becoming a bank, the company developed a hybrid model through which it sells a large chunk of its loans to institutional investors. It then puts a smaller but noteworthy portion on its balance sheet to collect recurring interest income payments. The move drastically changed the company's financial profile.
While it has been frustrating to watch shares sell-off so heavily this year, LendingClub is in a much different place from where it was pre-pandemic, yet trades at a similar share price. That's why I would advise shareholders to keep their faith and hold their shares right now.
Source Fool.com
