NEW YORK (TheStreet) -- Shares of LendingClub (LC - Get Report) are down by 6.75% to $4.42 on Tuesday afternoon, as the online lender will cut back loans to riskier borrowers and boost interest rates.
Interest rates will rise by a weighted average of 55 basis points, according to a regulatory filing, Bloomberg reports. The company also reduced the ratio of debt-to-income that it allows applicants to have.
Acting CEO Scott Sanborn is attempting to bolster investor confidence after founder Renaud Laplanche was forced to resign last month. The board had discovered issues with $22 million in loans sold to Jefferies as well as Laplanche's failure to disclose a personal investment in one of LendingClub's clients.
LendingClub separately disclosed that "given the developments of the last few weeks, the company is not yet in a position to provide stockholders a complete report on the state of the company," according to MarketWatch. It is consequently postponing the annual meeting, which was originally scheduled for 2 p.m. EDT on Tuesday, to June 28.
Also weighing on shares this afternoon, Baillie Gifford & Co. sold its entire 9.1% stake in the company, MarketWatch reports. The U.K.-based investment management company previously owned 34.6 million shares.
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 generally high debt management risk.
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.