NEW YORK (TheStreet) -- Lending Club (LC) opened sharply higher in its first day of trading Thursday after the highly anticipated initial public offering of the alternative lending platform.
Lending Club, which was priced at $15 a share the night before, opened near $25, a gain of more than 60%. The stock was slightly off in early trading, to the $23 area.
The stock also received its first buy rating, from BTIG analyst Mark Palmer.
"Four times larger than the next-largest company in the peer to-peer (P2P) lending space, [Lending Club] is poised to grow rapidly by taking advantage of failure of traditional banks to meet the credit needs of consumers and small businesses. The company faces none of the costs incurred by the large banks' bricks-and mortar branch networks, and its average fees are about 5% of the amount loaned," Palmer wrote in a note published Thursday.
Lending Club brings together borrowers who can't get loans from traditional banks and investors eager to lend out money for returns as high as 8%. Investments can be as little as $25. The company has attracted lots of attention from people wondering where the financial services industry is headed following the financial crisis.
Lending Club's Board of Directors features prominent names like former Morgan Stanley (MS) and Credit Suisse (CS) CEO John Mack, former Treasury Secretary Larry Summers, and Kleiner Perkins Caufield & Byers partner Mary Meeker.
Nine underwriters, led by Morgan Stanley, Goldman Sachs (GS) , Citigroup (C) and Credit Suisse, will wait roughly a month to kick off research coverage of Lending Club, honoring a "quiet period" that may or may not be required, but which banks observe to avoid regulatory scrutiny. Since BTIG is not an underwriter, it is not affected by those issues.