Desperate Lending Club Raises Interest Rates To Encourage Investors, Postpones Shareholder Meeting

After embattled Lending Club was briefly halted as it postpones today's shareholder meeting until June 28th because it is "not yet in a position to report on the state of the company," the stock is trading down 5% as the desperate (for investors) lender decides to raise prices (interest rates) in this case for borrowers (and tighten up lending standards).

So a triple whammy... Postponed Annual Shareholder Meeting...

On June 7, 2016, LendingClub Corporation (the “Company”) adjourned its 2016 Annual Meeting of Stockholders (“Annual Meeting”).

 

Given the developments of the last few weeks, the Company is not yet in a position to provide its stockholders a complete report on the state of the Company. Accordingly, the Company will reconvene its Annual Meeting at 11:00 a.m. Pacific Time on June 28, 2016, with the same virtual meeting access.

 

...the Company is not yet in a position to provide its stockholders a complete report on the state of the Company. Accordingly, the Company will reconvene its Annual Meeting at 11:00 a.m. Pacific Time on June 28, 2016, with the same virtual meeting access

And raising rates...

Effective June 7, 2016, Lending Club's platform interest rates are increasing to boost the attractiveness of the asset to investors, while ensuring the Company’s offering remains competitive for borrowers.
Interest rates will increase by a weighted average of 55 basis points across the grade and term spectrum, calculated based on grade and term mix in Q1 2016.
Rates are increasing across all grades but changes are concentrated in grades D, E and F.

And tightening standards...

Debt-to-Income criteria are being reduced to 35% from 40% effective today... as result, the company expects standard program loan volume to fall by ~5%

 

Minimum criteria for borrowers to get standard loan program now include minimum FICO score of 660, DTI ratio ex. mortgage

It seems the market is questioning the entire firm's businesss model...