LendingClub abruptly adjourned its annual shareholder meeting Tuesday, saying it wasn't ready to address investors after a leadership shakeup last month. It also overhauled criteria for the consumer loans it arranges online.
The company's stock halted amid the announcements, then dropped 5 percent to $4.50 as of 2:33 p.m. in New York. It's down 59 percent this year, with much of the decline tied to founder Renaud Laplanche's surprise resignation as chief executive officer and chairman a month ago.
"Given the developments of the last few weeks, the company is not yet in a position to provide its stockholders a complete report on the state of the company," San Francisco-based LendingClub said Tuesday in a filing just as the meeting was to start. It rescheduled the event for June 28.
Acting CEO Scott Sanborn is trying to shore up investor confidence hurt by last month's announcement that a botched loan sale and disclosure lapses prompted Laplanche's exit. That exacerbated a slide in the firm's stock over the past year amid concerns that it might struggle to lure investors necessary to extend its rapid growth.
On Tuesday, LendingClub said it's boosting interest rates and tightening criteria for borrowers to qualify for loans. The firm will raise rates by a weighted average of 55 basis points, while lowering the ratio of debt-to-income that it allows applicants to have, according to a filing.
"There's probably going to be a lot of volatility around the stock until they put out what the expected guidance is going to be" and hold regular annual meetings, said Matt Burton, CEO of Orchard Platform, a data provider for the marketplace loan industry.
Meantime, the new loan criteria is "good news," he said. "Rising borrower interest rates and tightening credit approvals mean new loans should be higher-performing and possibly more attractive to investors."
LendingClub, which matches consumers seeking loans online with investors looking to fund them, was a stock-market darling just 18 months ago. Its shares soared after an initial public offering in December 2014, briefly valuing the venture at more than $10 billion. But they soon began sliding amid mounting competition and signs that some debts were failing at higher-than-expected rates.
On May 9, the company stunned shareholders by announcing that Laplanche had resigned after internal reviews. The board cited two incidents: Staff had altered application dates on $3 million of loans before their sale, and Laplanche failed to disclose his interests in a fund that LendingClub was considering investing in.
The firm said Monday morning that Sanborn and finance chief Carrie Dolan wouldn't speak as scheduled to investors at an event hosted by Stifel Financial Corp. A company spokesman declined to elaborate at the time on why the appearance was canceled. LendingClub stopped providing guidance to investors on May 9, when it announced Laplanche's exit.