Lending Club (LC) has brought me good returns but also burned me by crashing. I left the stock once I lost about 35%. Well, today, the stock fell 36% when the CEO resigned for improper loan sale. Hmmm…the firm maintains that other things are cool and it is an isolated event. Let’s hope so. But when you do improper things that gets you fired immediately, you wonder what else is going on.

However, I do wonder whether it is an overreaction. More than 1/3 of the company’s market cap disappeared. Hmmm…Unless there is systematic fraud, the market reaction seems excessive. But for now, it is better to not touch the stock until everything is clear. If LC provides better numbers soon, we will come and revisit the stock. For now, wait and see is not a bad option.

 

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