I received this email yesterday as well. Here are my thoughts:
1. This offer is certainly better than a sharp stick in the eye, but it essentially skirts the issue that, I believe, is top-of-mind for most retail investors. I actually quite appreciate that there is some sort of enticement to lure back skittish retail borrowers. It shows that management is actively trying to reach out. What's more, adding 2% to my yield is nothing to sneeze at. But at the end of the day, like many on this forum have pointed out, the offer doesn't address the fundamental issue of no BRV being in place for the retail investor. When I analyze my own financial situation, this is still the overarching concern which prevents me from returning to buying loans. As great as this 2% may be, the "unknown unknowns" (it's the uncertainty, stupid) of what my notes would look like if things get ugly fast outweighs a 2% bump in yield. That is how I see it, anyway. Others may feel different, or have a different risk tolerance.
2. While this may not lure me back to reinvesting, let alone incite me to deploy large amounts of new capital, hopefully this carrot is sufficient for enough retail investors to prevent a massive funding shortfall that creates a further self-defeating crisis of confidence. Let's face it, what we're essentially dealing with is a classic run on the bank, or crisis of confidence. I don't think there are any major systemic issues (although I could be wrong) that suddenly went into play a few weeks ago. If all institutional investors and retail investors suddenly decided to start reinvesting all at once, then the RL affair and all the drama that it entails would be a blip on the radar screen. What we are dealing with is a crisis of confidence. The FDIC is in place to prevent bank runs. A BRV is the type of vehicle that is needed to prevent a crisis of confidence for some segment of retail investors. When all is said and done, this RL debacle could turn out to be a blessing in disguise in that it awakens the board and upper-management to the need to think long and hard about funding sources in crises situations. When Mario Draghi promised to "do whatever it takes" to stop the Euro-zone crisis, it had the intended effect of stopping the panic and prevented the ECB from doing a lot more. Mr. Sanborn needs to heed lessons from the past 8-9 years and come out with what is effectively bazooka, not just an enticement to pad returns. In a panic, investors are more interested in return of investment than return on investment.
3. I don't see what is happening behind the scenes. I don't know what the temperature is among other retail investors, or what funding shortfalls may, or may not, exist. It may very well be that many retail investors are somewhat oblivious to what has transpired in the past few weeks and are reinvesting as if nothing ever happened. I may be a minority voice, I don't know for sure. If this is the case, then the 2% enticement may essentially do the trick. LC has all the data on their investors and they can measure the impact of their communication and offer. If this is enough to right the ship, then maybe LC is right to focus on the silent majority and not the vocal minority. If, however, this forum is a proxy for a wider cross-section of LC investors, LC may need to rethink their approach to shoring up confidence.
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