LendingClub shares soar in market debut

NEW YORK - LendingClub (LC) shares are up more more than 50 percent on the company's first day as a public company.

San Francisco-based LendingClub makes personal and small business loans by connecting borrowers with investors. The company says that makes it easier and faster to apply for a loan than going to a bank. Borrowers are often approved within a couple of days.

In midday trading Thursday, its shares were up $7.89, or nearly 53 percent, to $22.89 after trading as high as $25.44 earlier.

The company raised $870 million by offering 58 million shares at $15 per share. Its stock was listed on the New York Stock Exchange under the ticker symbol "LC."

LendingClub, which claims to be the largest marketplace of online loans, says it has helped arrange more than $6.2 billion in loans since its debut in 2007. Individuals can take out personal loans of up to $35,000, while business loans are limited to $100,000. Investors can put in as little as $25 per loan and build a portfolio of investments of risk-adjusted returns to suit their needs.

LendingClub saw a $22.8 million loss for the first nine months of 2014, down from earnings of $4.5 million in the year-ago period. The IPO proceeds will give the company the resources to continue pursing growth, with profits returning at some point in the future.

Not everyone is sold on LendingClub. Brian Hamilton, chairman of SageWorks, a research firm that provides information about private companies, notes that LendingClub's IPO values the company at nearly 700 times its trailing earnings.

"This kind of IPO value is unprecedented, even for companies like Google and Apple that totally revolutionized their industries," he said in an email. "It is another example of an IPO where the price and value seem to have no rational basis."