Lending Club shares soar on market debut
11 December 2014 | 6414 views | 0
Shares in Lending Club soared 55% to $23.23 in morning trading on the peer-to-peer loan specialist's market debut.
The firm priced its IPO on the New York Stock Exchange at $15 a share, valuing it at $5.4 billion and raising at least $870 million. But the stock opened at $24.75 before settling down slightly to $23.23 at midday, giving a valuation closer to $9 billion.
Lending Club launched in 2007, providing an online forum where potential borrowers and lenders can thrash out terms of a deal. After facing some early regulatory trouble, the firm has gone from strength to strength, and has now facilitated more than $6 billion in loans.
The IPO is seen as a watershed moment for the fast-growing P2P market, as Lending Club and others seek to move from the margins and establish themselves as viable alternatives to traditional lenders.
Giles Andrews, founder of UK-based Zopa, says: "The scale of this listing is a clear sign of the effect that peer-to-peer lending is having on finance and you can expect people to pay much closer attention now."
Meanwhile, Sam Hodges, US managing director of Funding Circle, which focusses on small business lending, says that P2P lending firms are, like Uber and Airbnb, part of the new sharing economy, and that Lending Club's IPO is validation of the industry as a "truly disruptive force".
It is not just the P2P market that is benefiting from Lending Club's IPO; founder Renaud Laplanche is pocketing $223.5 million, according to the New York Times, while high-profile board members Lawrence Summers and John Mack are in line for $15 million and $37.5 million, respectively.