LendingClub, the only digital bank that is publicly traded, is currently experiencing a decline in its share price, trading below $6. This comes as the overall market is sinking and the reality of a prolonged economic downturn settles in. Additionally, the US government’s need to service its massive debt at a higher cost is likely to limit other investment opportunities.
LendingClub is being seen as a fintech company that went public prematurely. Its shares were traded at almost $12 a year ago, resulting in a 50% decrease in value today. However, when LendingClub initially went public in 2014, it sold its shares at $15 each. It is important to note the company’s decision to pursue a reverse stock split. According to Yahoo, LC’s all-time high reached over $120 per share.
The challenging economic conditions have impacted LendingClub’s growth, as consumers are cutting back and interest rates are slowing down the economy. In an attempt to revive growth, LendingClub aims to empower its users and provide access to a wide range of financial products and educational resources. However, the company will need to expand its services to meet the growing demand for more comprehensive digital banking options.
For investors who participated in the public offering and still hold shares, the road ahead looks bleak. It will be a long journey to regain a $9 billion market valuation from the current valuation of approximately $620 million.
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