When LendingClub Corp. (NYSE: LC) CEO Renaud Laplanche resigned a month ago, the company’s stock dived more than 25%. A rumor Wednesday morning suggested that Laplanche was interested in putting together a takeover bid for LendingClub and pushed the stock up about 6% before less appealing news nudged its way in.
On Tuesday, the company postponed its annual shareholders meeting just moments before it was scheduled to begin and rescheduled the meeting for June 28. The worst news was yet to come, though. The company’s second-largest shareholder, Scotland’s Baillie Gifford, sold its entire 9% stake in the company on the same day.
Laplanche was reported to have been talking with private equity firms and banks about buying out the company and taking it private. He was replaced by LendingClub’s board after an internal review revealed that documentation related to the sale of $22 million of loans to a single investor had been falsified.
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The U.S. Department of Justice and the New York state Department of Financial Services are investigating the firm’s business practices.
LendingClub also announced on Tuesday that it is raising its interest rates to borrowers by an average of 55 basis points across its grade and term spectrum. The company said it was making the change “to boost the attractiveness of the asset to investors, while ensuring that the Company’s offering remains competitive for borrowers.”
The interest rate increases affect all loan grades, but the largest increases were made on lower quality loans. Loans with a grade of A saw interest rates rise 43 basis points to 6.7%, while loans of grade E now carry interest rates of 24.07%, an increase of 117 basis points.
The company’s shares rose to $4.69 Wednesday morning before slipping to trade at around $4.28 in the early afternoon. The stock’s 52-week range is $3.44 to $17.52.
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