Today, Lending Club released an updated S-1 filing for its upcoming IPO. In this document is the long awaited confirmation that Lending Club will be reserving shares in their IPO for retail investors.
This is something that has been hinted about before and when I interviewed Lending Club CEO Renaud Laplanche recently on the Lend Academy Podcast he indicated that was their intention. But this is the first time that we have seen hard evidence that this will actually happen. There is a “Directed Share Program” section buried deep in the S-1 that provides this information (emphasis is mine):
At our request, the underwriters have reserved % of the shares of common stock offered by this prospectus for sale, at the initial public offering price, to our directors, officers, employees, investors that have invested through our marketplace as of September 30, 2014 and other individuals related to us. Shares purchased by our directors and officers will be subject to a 180-day lock-up restriction. The number of shares of common stock available for sale to the general public will be reduced to the extent these individuals purchase such reserved shares. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus.
While we have no idea what percentage they are reserving it is pretty clear that some shares will be available to retail investors come IPO time. I reached out to Lending Club today for more details but not surprisingly they had no comment. Rest assured you will hear about it on Lend Academy as soon as more information is made available.
Lending Club Will Be Listed on the NYSE With Ticker Symbol “LC”
Also in this prospectus is the confirmation that Lending Club will be listing on the New York Stock Exchange (NYSE) under the ticker symbol “LC”. There was some competition between the NYSE and Nasdaq to obtain the listing. It looks like the NYSE won the day so in the near future we will probably see Renaud Laplanche and other Lending Club executives ringing the opening or closing bell there on IPO day.
There has been coverage today of this news by The New York Times as well as the Financial Times who really have their finger on the pulse of the Lending Club IPO.
This is fantastic news.
Well done, Lending Club. THANK YOU for remembering those small, retail investors who had faith in and got this wonderful company off the ground, long before the institutional money took an interest.
I look forward to buying as many pre-IPO shares as you guys will sell me.
Agreed Josh. I intend to be participating as well.
Thanks for the information. I had read about this earlier and was looking up articles on this. I couldn’t find much about it. Then I remembered Lend Academy. Sure enough first article on the page. Good job. Please keep us posted. Does anyone recommend a broker? This will be my first time for an IPO.
Thanks Ben
I’m fairly certain Loyal3 will be the entity by which mere mortals can get in on the IPO. In the deep dark terms and conditions, Loyal3 says that the company going public can govern the rules on who gets shares. Perhaps LC will wind up giving them a list of SSNs which had an investment account prior to 30 Sep 14 and saying, “here’s who qualifies.”
I agree that Loyal3 is the likely broker for administering this offering to investors. They have already invested in the IT infrastructure and have completed 6-7 of these types of IPOs. Some to only employees, some to the entire public. Loyal3 and Lending Club are neighbors in San Francisco. Also, one of the first IPOs available on Loyal3 was Banco Santander’s US division, Santander Consumer USA. Lend Academy pointed out that this company is one of the larger investors on the LC platform. Yet another connection.
https://www.lendacademy.com/lending-clubs-major-platform-investors-ipo/
I have heard the Loyal3 name bandied around quite a bit (although nothing official). I didn’t know of their connections to Lending Club so that might help their cause.
Well this is exciting! But I bet Peter gets first dibs (cue DanB)
Ha. I actually very much doubt I will get any special treatment here.
I hope that any “limit” on shares is a big one… I’d like to buy a lot of LC shares if I can.
Given that Lending Club is intending to raise $500 million and that they will probably allocate a very small portion of that to their investors I think the limit will be relatively small. While most of their tens of thousands of investors will not participate there will be a enough interest that any limit will be easily filled I expect.
I would pay ANY price for these shares. $6bn valuation? Cool – i am in! $8bn? Even cooler…this is the FUTURE!!!
A company that aggregates consumer debt, slices it up and sells it hedge funds…WOW…I mean NEXT GENERATION STUFF people!!!!
You are not alone in your skepticism. There are many who think the valuation is way too high and this whole sector is over-inflated when it comes to valuations. I don’t really care what their valuation is at the IPO as I intend to buy their shares and hold for a very long time (decades).
This is awesome news. I’m grateful for the company’s position on needing to allocate attention to retail, just like allocating loans, etc.
If I’m reading your comment here correctly, it seems you have less stock in the meaning of the valuation and more in the company itself? That’s about where I’m at. This is a great company that I would love to pick up IPO shares in, but the mutli-billion$ valuation seems a little bizarre. Of course, I assume this is normal for tech IPOs and what not. But still.
That is correct Simon. I am pretty agnostic on whether LC comes in at $5 billion or $8 billion for their IPO. It is a great company that I am happy to invest in for the long haul.
So are all the shares that are going to be “reserved” going to be subject to the 180 day lock-up restriction or just the ones that end up being purchased by directors & officers?
Lending Club has gone completely silent right now so there is no feedback coming from them but I would be surprised if there is a 180-day lockup for retail investors.
Thanks for everyones input. I have heard of Loyal3 but don’t know if I can trust them. I think I would feel more secure with Scottrade or E-trade. At least they have been robbing us for years. LOL. I’ve been saving up my money for a year now. Last I heard it was going to drop the third week of November? Getting kind of antsy and want to put it in a brokerage soon. I definitely don’t want to miss out on this. Anyone who was invested in an IPO, I would like to hear from you. Thanks.
I have never invested in an IPO so I can’t help you there. But I will be providing information on Lend Academy on how to participate as soon as we know. As for timing, there are only rumors flying because I don’t even LC has decided yet. But the third week of November is a good bet.
Ben,
I’ve invested in one of the Loyal3 IPOs. Dave & Buster’s (PLAY). But I did it to learn the IPO process in anticipation of the LC IPO, and sold my shares a day later. You can read about the experience on my blog. LC on Loyal3 is speculation at this point, but it seems to make a lot of sense with the facts we have.
-RBD
Thanks RBD. If LC does end up using Loyal3 for their IPO your article will come in useful for many people: http://www.retirebeforedad.com/2014/10/15/loyal3-ipo-review-dave-and-busters/
So there was no way to have like a standing order or pre-order in place?
Retire Before Dad…………………..So there was no way to have like a standing order or pre-order in place?
Thanks RBD,
I will go read the article. I’m glad someone has used Loyal3. It sounds like at least it functions properly.
Thank you Peter. I’m just putting my name in the hat for follow up comments on this guy!
Word is LC IPO now a January event. Unfortunate. Can you confirm? Thanks.
B, My sources tell me it is still happening in November, before Thanksgiving. Stay tuned.
This is exciting news because it further legitimize p2p lending. However, any extra cash that I can deploy will still go to buying notes in the platform rather than buying LC shares as even them will not be immune to the vagaries and gyrations of the market. Having said that 10 years from now I fully expect great appreciation in LC shares.
LC has confirmed by email to members today that any shares offered through the DSP will require having an account with Fidelity.
Peter, are you planning on putting money into the ipo? What is the most you would pay, or are you so excited you would buy in at any price no matter how high?
Yes, I am planning on putting a small amount of money into the IPO. I am considering this a long term investment so I will be investing at any level below an $8 billion valuation.
Also considering opting in as a retail investor. Looking forward to LC breaking the silence!
DJ,
If you haven’t opted in yet then I am afraid you are too late ti participate in the IPO. The deadline was last Sunday. You will still be able to buy shares on the IPO day through a regular brokerage account but retail investors who have opted in will be able to buy shares at the IPO strike price.
Thanks – fortunately I ‘opted in’ via the e-mail before Sunday.