Questions continue to swirl around LendingClub (LC - Get Report) driving its stock down into territory where speculation has begun to arise that it could become a take over target. But with the speculation, analysts are skeptical that the company would be a viable buy-out candidate.
Renaud Laplanche, the embattled marketplace lending platform's founder and former CEO who was ousted in early May, is considering making an offer to take the company private.
"On the one hand, it's no surprise that he'd want to come in and try to be a white knight," analyst Bob Ramsey of FBR Capital Markets said. "The problems with the company stem from a credibility issue and part of that problem ties back to Renaud."
As far as what Laplanche could conceivably pay for LendingClub, analyst Henry Coffey of Sterne Agee said the price will be a high premium compared to the current share price.
And whether the company could go to a potential acquirer? Coffey said that raises more questions.
"You have to ask yourself what do they have that someone would want?" Coffey said. "Is their technology there that would be worth paying? Is there intellectual property of value? Is the customer list that's valuable? There are a lot of open questions that may or may not equal a yes."
Shares of LendingClub fell in after hours trading following news that the company has postponed its shareholder meeting and raised interest rates on loans, as well as rumors that its former CEO is considering a buyout.
The company's trading price fell 7% after hours, and have fallen approximately 1.5% Wednesday, to $4.32 per share.
Michael Tarkan of Compass Point Investment and Research reiterated his sell rating on LendingClub Wednesday. He has a $3 per share price target for the company. Bob Ramsey of FBR Capital Markets downgraded the company to market perform, and dropped his target price to $4 per share. Coffey rated the company at underperform May 19, and has a price target of $3 per share.
"The stock has sold off, the valuation is a lot cheaper than it used to be and cheaper than private market valuations," Ramsey said. "All of that I'm sure attracts attention."
The problem, though, lies in finding a buyer who isn't Laplanche.
"I think a bank would be unlikely because I think a piece of the value proposition is the company's independence from a bank and ability to partner with a banks," Ramsey said.
He added that a private equity firm could fund the company, but the likelihood of even that is uncertain.
"I think the bottom line is that there are still a lot of questions that are out there," said Tarkan of Compass Point. "It's hard to have a sense as to what the ultimate outcome is here."
LendingClub has seen its value drop 40% since May 6, when news broke that the company had sold loans to Jefferies that did not fit criteria. This news lead to the company firing its CEO, Renad Laplanche, and has resulted in a Department of Justice investigation into its practices.
"We think that there clearly are signs of trouble," FBR's Ramsey said. "I've never heard of a company adjourning its annual shareholder meeting before."
He pointed to three negative data points that came out this week - lower weekly sales, a huge decrease in direct-to-mail marketing and an increase in interest rates - as reasons for his lack of confidence in LendingClub.
"Since they fired Renaud it sounds like the gang that couldn't shoot straight," Coffey said. "They can't get out of their own way."
On Tuesday the embattled marketplace lending platform abruptly cancelled its meeting, rescheduling it for the end of June. The company also announced that it is increasing interest rates.
Analysts seem to agree that tighter regulations on the online lending marketplace industry could not have stopped what happened at LendingClub.
"New regulation or some of that clarity is not a near term event," Tarkan said. "We do believe that additional regulation is coming in the space."
But, both Tarkan and Ramsey noted, most of the problems driving down LendingClub's share price are specific to the company, not to the lending marketplace industry.
"Some of the issues seem LendingClub specific," Ramsey said.
Compounding recent struggles, one of LendingClub's largest shareholders, Scottish investment firm Baillie Gifford, disclosed Tuesday in a filing with the SEC that it had sold its entire 9% stake in the company.
LendingClub declined further comment on the 8K and on the Laplanche rumors Wednesday. Laplanche could not be reached for comment.