This stock is down 21%+ on Jan 27, 2022 — “dismal” Q4 results
Tweet threads highlighting the stock
Tweet from Raging Capital on the selloff
Tweet from Hareng_Rouge on the opportunity (was at $12)
Radius Bancorp acquisition — Feb 2020 for $185m in cash & stock deal to add a traditional bank structure to the business
Strategic and financial benefits of the Acquisition include:
- Increased and more stable revenue driven by the addition of net interest income from loans held for investment, complementing existing marketplace revenue streams;
- Increased opportunity to attract new members and deepen relationships with existing members through the addition of new digital banking products and services that leverage LendingClub’s marketing and brand strengths;
- Increased resiliency with access to stable, low-cost deposit funding replacing higher-cost and more volatile third-party warehouse funding; and
- Expense benefits by capturing the fees that were historically paid to third-party issuing banks.
Financials & Valuation
Using 2x sales on 2022 guidance = $2.3bn market value or $21 per share. This target is for the next ~9 months as they execute in 2022. Sales and earnings growth would obviously extend that in 2023 and beyond.
Link to LC model
LendingClub ($LC) — Initiation
August 2022 — VIC write-up: long at $14
February 2020 — Radius Bancorp Acquisition PDF