Courtesy of Benzinga.
Shares of LendingClub Corp (NYSE: LC) lost 34.37 percent on Monday, following the announcement of the resignation of the company’s Founder, CEO and Chairman, Renaud Laplanche, and two other senior executives. The departures came after news that the company had misplaced the sale of a relatively small amount of loans, $22 million, and re-dated another $3 million in loans.
Following these events, analysts at Stifel downgraded the stock from Buy to Hold, removing their price target of $22.00. William Blair suspended coverage on the stock.
Stifel experts explained that their thesis on LendingClub was based on the opportunity for the company to “build a multi-product suite of services on top of its initial unsecured lending platform.” In fact, the analysts added they had “put a lot of faith in the team’s ability to execute and build trust with lenders and consumers.” Now, this trust has been shaken and the company’s long-term prospects put in question.
For their part, researchers at William Blair said they were suspending their rating on LendingClub in account of the “violation of the company’s business practices along with the lack of full disclosure during the review, [and] an unrelated material weakness in internal control in financial reporting related to the failure to disclose personal investment interests held in a third-party fund.” The firm cited the lack of guidance as one more reason to no longer rate the shares.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
Latest Ratings for LC
Date | Firm | Action | From | To |
---|---|---|---|---|
May 2016 | Pacific Crest | Maintains | Overweight | |
Apr 2016 | Raymond James | Initiates Coverage on | Market Perform | |
Mar 2016 | Craig-Hallum | Initiates Coverage on | Buy |
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