5 Surprising Things You Probably Didn’t Know About LendingClub

Investors were left licking their wounds as LendingClub dropped like a rock boulder last week. That’s when news got out that the firm’s CEO was leaving. The company explained away Renaud Laplanche’s departure with 2 reasons: 1) a mispricing/mislableing of a series of loans sold to Jeffries and 2) an undisclosed equity position in a fund buying LendingClub loans after LendingClub itself invested in said fund.

Last week, we described and summarized much of the fuss going on at LendingClub. As the public is internalizing the news, the media is left trying to really understand what happened.

Here are some surprising things about LendingClub that are worth noting:

1) LendingClub was testing loan drones – seriously? The company was rumored to be testing a loan drone — an unmanned aerial vehicle. The idea was that a remote-controlled vehicle like this could deliver wads of cash to borrowers directly to their homes within minutes or hours after being approved for a loan. Seriously?! Well, the firm’s (now ex-) CEO displayed a panache for this type of spectacle when he helicoptered in cash on attendees using a similar device at the Lendit Conference last year.

2) Jim Chanos, who called Enron, was short the stock: Jim Chanos, who predicted energy trader Enron’s collapse, just happened to be short LendingClub stock when it cratered. When interviewed why he was betting against the company, Chanos famously said, “We had problems with the model.” With the stock down close to 50% in just the last 30 days, we’re left wondering whether Chanos has closed out his trade or if he continues to see further downside to the shares.

3) Did an investor rat LendingClub out to the Department of Justice? The firm received a DoJ grand jury subpoena on May 9th, according to the company’s earnings report, the same day that the company announced the resignation of its CEO. Sean Murray found this to be funny timing because essentially, in spite of the best explanations the company gave regarding Laplanche’s exit, there still doesn’t seem to be a smoking gun. He conjectures that the triggering of the legal interest in LendingClub could have come from an investor (in this case, Jeffries itself) that tipped off the Department of Justice.