Online Lending IPOs Off to a Bad StartJanuary 12, 2016 | By: Sean Murray
All the major stock indexes have tanked so far in 2016 but the new online lending stocks have really taken a beating.
OnDeck closed at $8.57 yesterday, near its all-time low. Investors, who originally appeared to have renewed interest after the JPMorgan Chase partnership announcement, have disappeared, even before details of the announcement emerged.
Lending Club and Yirendai have also plummeted. Meanwhile loanDepot cancelled their IPO altogether after concerns about the pricing environment in the public markets.
— Renaissance Capital (@IPOtweet) January 11, 2016
Yirendai, a Chinese Peer-to-Peer lender that was spun off from CreditEase has gone nowhere but down in its first month. They had originally hoped to get a public valuation of $2 billion but instead came in at around $625 million.
Here is what some day traders are saying out there:
— WingPuppy (@WingPuppy) Dec. 26 at 01:11 PM
— Stanky Pigano (@StankyPigano) Dec. 23 at 01:23 PM
$ONDK Awful Business Model, lend at insanely high interest rate to "subprime" businesses, they cant pay because the rate is so high #deault
— Alex Baker (@abaker) Jan. 5 at 10:19 PM
How is $LC not a massive buy right now? It is trading at a 52 week low and at 50% of IPO.
— Kaz Nejatian (@CanadaKaz) January 7, 2016
Will online lenders change the mind of the public markets later this year?Last modified: January 12, 2016
Sean Murray is the founder of deBanked, an 11-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper note investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.