NEW YORK (TheStreet) -- Shares of LendingClub (LC) - Get Report are surging by 15.1% to $5.03 in mid-morning trading on Friday, as it enters discussions with Citigroup about purchasing loans or providing additional financing, sources told the Wall Street Journal.
The discussions are part of LendingClub's efforts to reassure its existing investors and attract new commitments from them after CEO Renaud Laplanche was forced to resign earlier this month.
Laplanche resigned after the board discovered that employees had falsified data on certain loans sold to Jefferies as well as Laplanche's failure to disclose a personal investment in one of LendingClub's clients.
Additionally, LendingClub is working with two banks that were involved in securitization deals that stalled when Laplanche left, the Journal reports. The company and its lawyers are discussing commitments with funds that currently purchase loans, with Jefferies as an adviser.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D-.
LendingClub's weaknesses include its generally disappointing historical performance in the stock itself and poor profit margins.
You can view the full analysis from the report here: LC
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.