Update: The decline in LendingClub's stock price since its IPO has been updated to reflect trading as of April 16.
NEW YORK (TheStreet) -- LendingClub (LC - Get Report), the online peer-to-peer lender that's been struggling since going public in December, is looking for new ways to expand and even developing new payment devices.
Shares have fallen nearly 17% since the close on its first day of trading Dec. 11, its in large part because of disappointing fourth-quarter earnings released in February and lower-than-expected forecasts for 2015.
LendingClub says it is the world's largest online marketplace for consumer loans, offering comparatively low rates by directly connecting borrowers and lenders and eliminating bank intermediaries.
The partnership with Citi follows LendingClub's strategic partnerships this year with Google (GOOGL - Get Report), Alibaba (BABA - Get Report) and BancAlliance. Along with alternative management firm Varadero Capital, the new partnership will allow LendingClub to make up to $150 million in loans under the mandate of building underserved communities.
The partnership was announced at a sold-out crowd at New York meeting of LendIt USA, a global conference series on online lending. But the biggest surprise came when CEO Renaud Laplanche pulled back a sheet to unveil a bright orange box, seven inches per side.
"We call it The Cube," Laplanche said. The Cube is apparently intended to be used to as a payment device, though it's still unclear how it will work and even who might want to use it. Laplanche said the online lending market demands speed and convenience, which The Cube is designed to provide. The Cube would offer voice recognition, digital display, touch-screen keypad, scanner and Wi-Fi connection.
Even analysts weren't quite sure what to make of The Cube.
"We're still in the early innings in terms of learning what LendingClub's future will look like," said Mark Palmer, an analyst with BTIG. "There's been a lot of focus on how mobile can be adapted to fit all of these alternative financial model. But it isn't the delivery that matters, it's the value proposition that LendingClub offers." BTIG holds a buy rating for LendingClub with a price target of $31.
One explanation for the concept Cube could be LendingClub's robust liquidity profile, allowing it to experiment with new ventures, according to Palmer. "There's $800 million in cash on balance sheet after its IPO they can put to use, and tremendous amount of flexibility in where it can go from here."
The Citi partnership, which caps the joint loan facilitation at $150 million, is negligible for LendingClub, and the stock movement is mostly a function of favorable public relations, according to Bruce Roberts, an analyst with FinTrust Brokerage Services, who said that "$150 million in loans is a drop in the bucket for LendingClub."
By comparison, LendingClub originated $4.4 billion loans last year, according to the company's latest earnings filing.