The Status of Prosper Marketplace???
Loan investors will have to wait even longer to find out if the resignation of Prosper’s chief executive on Monday holds special significance. That’s because on Tuesday the company informed the SEC that they would be filing their 3rd quarter results late. They were unable to complete the report in a timely manner, according to the filing, “without unreasonable effort or expense due to a delay experienced by the Registrants in completing its financial statements and other disclosures in the Quarterly Report relating to a recent arbitration decision.”
Jay Antenen, the Senior Editor for DealReporter, said on twitter that the arbitration reference has to do with “the early 2013 loan purchase agreement Prosper signed with Colchis.” According to a brief Antenen published with Eleanor Duncan on Debtwire, “Under that deal, Colchis gained the right to see Prosper’s origination pipeline and bid for loans at no disadvantage to other investors on the platform.” Apparently, there may be some tension between Colchis and new investors.
This all belies the fact that Prosper’s previous quarter produced a gut-wrenching $35.5 million loss on just $28 million in revenue. They had $14 million in expenses just from restructuring related to their downsizing and layoffs which included the closing of their Salt Lake City office and the termination of 167 employees. Their first quarter of the year yielded a $17 million loss on $56.5 million in revenue.
On Monday, the company’s CFO, David Kimball, was promoted to CEO to take over Aaron Vermut’s role. Vermut will remain on the company’s board.Last modified: December 18, 2016
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.