LendingClub (NYSE:LC) shares slumped 30% in pre-trading market trading and declined 27 percent to $5.15 at 1:30 p.m., following the resignation of CEO Renaud Laplanche last Friday.
Renaud Laplanche, founder and CEO of LendingClub, resigned following “an internal review of sales of $22.0 million in near-prime loans to a single investor, in contravention of the investor’s express instructions as to a noncredit and no pricing element, in March and April 2016.” according to the reports released on Monday.
LendingClub is a pioneer and leading company in online lending industry, cutting out the middleman like banks and matching lenders and borrowers directly. The company became a popular peer-to-peer loan platform after financial crisis in 2008, due to its new concept of lending, which satisfied investors who was hoping modernize lending at that time. Board of LendingClub is also powerful, including former Morgan Stanley CEO John Mack, ex-U.S. Treasury Secretary Lawrence Summers, Mary Meeker, a partner at Kleiner Perkins Caufield & Byers, and so on.
The company also released its first quarter results on Monday, showing an increase in operating revenue and adjusted EBITDA. Operating revenue was $151.3 million in the first quarter, with an increase of 87% year-over-year. Adjusted EBITDA increased 137% year-over-year, reaching $25.2 million in the first quarter, according to the report.
LendingClub was really a success, and was the first of financial technology companies came to IPO after financial crisis. However, after going public in 2014, LendingClub shares kept falling from $25.47 in December 2014, to $5.5 in early trading Monday after the announcement of CEO’s resignation. The company’s disappointing performance had a negative impact to other fintech companies that are considering going public.