LendingClub (LC) can’t catch a break.
The company just announced that it’s being sued by the FTC.
The lawsuit alleges that the peer to peer lender misled users about hidden fees.
If LendingClub was some new startup in Silicon Valley providing a marketplace for online, peer to peer loans to people, you’d think the stock would be through the roof.
But for all intents and purposes, LC lives in “Bizarro” online business stock performance world…
If you take the long term view, a company like LendingClub should be all upside in terms of its business model. Everything is moving online. Cryptocurrencies are interesting. Blockchain is interesting. Technology is getting better at using data to detect risk. Etc.
And yet… The stock has been absolutely crushed because of recurring legal issues.
Name Change Badly Needed
Even before the legal problems… IMHO the name “LendingClub” is not so great…
“LendingClub” reads as sort of stodgy, and for no reason.
It also doesn’t capture the potential and hope for where technology is going in the future in terms of digital lending, cryptocurrency possibilities and artificial intelligence, etc… All of these developments could help and become pivotal to LendingClub’s operational and financial sustainability.
Whenever the company manages to work through all of this, they should seriously consider a name change.
Name changes can work very well.
AOL used to be called “Quantum Computer Services”. Google was called “BackRub”…. Playboy was called “Stag Party”… Best Buy was called “Sound of Music”… There have been lots of successful name change stories.
Even Panera was once known as “Au Bon Pain”… No one remembers Au Bon Pain.
I think the same could be helpful for Lending Club.
And, for better or worse, people’s media memories have never been shorter.