May 11, 2016
The last week has signified an interesting turn in the relatively young history of the alternative lending industry. In particular, online lending took a hit and perpetuated a wave of skepticism around it.
The event to contribute to it is related to one of the largest alternative lenders – Lending Club – whose shares plummeted significantly in less than a week. In the period between May 6 and 10, Lending Club’s share prices went from $7.09 to $4.10 with the lowest point at $3.98 per share.
Overall, Lending Club’s share prices were reported to drop by 35%. Investigations around the quality of loans didn’t particularly help the situation.
Although Lending Club has been making headlines with the latest news on the resignation of its CEO and the fall of its share price, it is not the only company to feel the hit of the market. Another large lender (that, for your information, goes hand in hand with JPMorgan), OnDeck, has been hit as well, raising concerns about the industry as a whole.