Lending Club Q2: CFO Resigns, Originations Shrink, Huge LossesAugust 8, 2016 | By: deBanked Staff
Another earnings, another resignation. This time, it’s CFO Carrie Dolan who will be replaced in the interim by the company’s corporate controller Bradley Coleman.
In Q2, the company netted a loss of $81.4 million, compared to $4.1 million a year ago. The shocking increase is partially attributed to a $35.4 million write-down of Springstone’s Goodwill, the patient financing company they acquired two years ago. Meanwhile, professional service fees increased by $14.9 million as a result of all the lawyers and auditors required to handle the recent scandal. During the Q&A, Company CEO Scott Sanborn explained that such professional service fee related work were not one-time costs and would continue to an extent.
“Our efforts to reengage investors are working, with fifteen of our top twenty largest investors back on the platform today,” said Sanborn in a statement. However, it was unclear as to whether or not those investors will buy at the same levels as before and the five who haven’t returned were unnamed so the supposed rebound in confidence remains vague.
Retail investors remained fairly resilient, investing over $327 million in Q2, up 16% year-over-year. With 135,000 active individual investors, that means the average retail investor invested a little under $2,500 on the platform during the quarter.
Originations shrank from $2.75 billion in Q1 to $1.96 billion in Q2.
The company still managed to have $832 million in cash on its books and is therefore in a relatively strong position to escape its current problems.Last modified: August 8, 2016