[jbrown]

Sean had a great post this morning on yesterday's earnings call.

http://debanked.com/2015/08/have-you...rates-changed/

[isaacdstern]

went under $10 at one point

[mcaguru]

That's terrible for the shareholders (especially the mom and pop ones).

[isaacdstern]

Reality has set in that their algo cant produce any alpha.

They are selling off all their paper and not holding it on their balance sheet.

Bottom line is that they are just a super broker.

[MechantLoans]

There top 3 Executives still get paid nice annual salaries for a company that makes no money:

Mr. Noah Breslow $573K
Mr. Howard Katzenberg $410K
Mr. James Hobson $458k

ONDK is just another Enron in the making...

[MCNetwork]

Wow I didn't know they didn't balance sheet anything. That's how many mortgage lenders operate. They just sell their paper to big banks or the government. They're just a middleman...

[Sean Cash]

Wow I didn't know they didn't balance sheet anything. That's how many mortgage lenders operate. They just sell their paper to big banks or the government. They're just a middleman...

Well they were balance sheeting a lot of it but they have just recently made this big push to sell more of it. An affiliate of Jefferies has agreed to buy $500 mil of future loans, which is only about one quarter's worth of origination.

[Natan]

revenues down, EIY down, guidance was negative, still cutting off ISOs/channel partners, increasingly saturated market, stock goes to $5 by 12/31/2015, sorry if you bought into the hype..

[MCNetwork]

I don't know about $5. Now that ONDK has a market cap of about $700 million versus a revenue base of $250 million the price is actually a good place to start buying.

[Natan]

well they have 69MM shares vs 5MM just last year, so major dilution, hence shares losing value, at this rate no reason they wont push this thing lower.

I also am not sure how/why 2.8Xsales ratio is "a good place to start buying", when reserve and delinquency ratios are both up yoy, things are not moving in the right direction.

Now if you're also a funder you know how competitive the marketplace is and that wall st projections are overly optimistic (maybe to boost UWing fees..)

[Sean Cash]

Lending Club's acquisition costs are actually decreasing. http://www.prnewswire.com/news-relea...300123593.html

[Sean Cash]

what are everyone's thoughts about the supposed saturation of direct mail marketing and pay-per-click? Is anyone else noticing a difference in their response rates?

[MatthewAStucchio]

revenues down, EIY down, guidance was negative, still cutting off ISOs/channel partners, increasingly saturated market, stock goes to $5 by 12/31/2015, sorry if you bought into the hype..

agreed

[Mmarano]

No question about that. They're for sure working day and night to bring regulation to the industry. Between 60%-66% of the 150mm they funded last month is from a direct sales team they have and from merchants applying online.

This comes from good knowledge, not fluffer nutter

Reality has set in that their algo cant produce any alpha.

They are selling off all their paper and not holding it on their balance sheet.

Bottom line is that they are just a super broker.

[MCNetwork]

what are everyone's thoughts about the supposed saturation of direct mail marketing and pay-per-click? Is anyone else noticing a difference in their response rates?

Direct mail is definitely getting saturated but this just means you did to be a little more creative with your material. A basic card saying "You've been pre-approved!" just won't cut it anymore. Pay-per-click is already saturated which makes it a very expensive marketing channel.

[AlexSMF]

No question about that. They're for sure working day and night to bring regulation to the industry. Between 60%-66% of the 150mm they funded last month is from a direct sales team they have and from merchants applying online.

This comes from good knowledge, not fluffer nutter

As they should. Regulation in this industry would be the best possible thing to happen. Everyone needs to stop kidding themselves and admit that the space is overly saturated with people that have no business leaving their house unsupervised. I saw this happen with the mortgage industry, regulation came about, people *****ed, the ones who had no business being in the industry left because they either couldn't pass the test or the background check, and the ones remaining are making money because they dont have to compete with 400 others for the same client.

[Mmarano]

I'm not opposed to guide lines. I don't have a criminal past. We run a clean shop. I'm talking about one company looking to take over a space by any means, which wouldn't leave much money for anyone else. If for arguments sake the play was for them to "remove any and all competition" That's an issue. I think competition is good. Competition is America. I'll always make money, no matter what i do. I just think the reason they're at that table is "different than helping the merchant" Self serving is my take on it. That's naturally just said for the sake of Banter..

As they should. Regulation in this industry would be the best possible thing to happen. Everyone needs to stop kidding themselves and admit that the space is overly saturated with people that have no business leaving their house unsupervised. I saw this happen with the mortgage industry, regulation came about, people *****ed, the ones who had no business being in the industry left because they either couldn't pass the test or the background check, and the ones remaining are making money because they dont have to compete with 400 others for the same client.

[skideeppow]

I have to say, i just funded a 25k deal. Start to finish was 2 hours. From submission, to approval to funding. Pretty amazed with their auto checkout.

[Chambo]

heh...shouldn't leave the house unsupervised. Love it

[Mmarano]

Also, 90% of the business owners in America .. Never even heard of a Cash Advance.

As they should. Regulation in this industry would be the best possible thing to happen. Everyone needs to stop kidding themselves and admit that the space is overly saturated with people that have no business leaving their house unsupervised. I saw this happen with the mortgage industry, regulation came about, people *****ed, the ones who had no business being in the industry left because they either couldn't pass the test or the background check, and the ones remaining are making money because they dont have to compete with 400 others for the same client.

[Mmarano]

yes, I am one of the shops that they still work with - Online check out is pretty cool.

I have to say, i just funded a 25k deal. Start to finish was 2 hours. From submission, to approval to funding. Pretty amazed with their auto checkout.

[mcaguru]

They are a good company. we are in this business all day so we think the world resolves around us. My friend just told me he paid a gardner company $500 bucks and they never came back. another friend leased a copy machine for 199 a month (for 60 months!!) and found out it was a used 4 year old machine --- Name any business and you will find a Double digit percent are slime!!

Regarding Ondeck, They are at the mercy of the ISO/Broker Market. (Sooner or later they will come to realize that -- I am happy to demonstrate to them why that's the FACT!).

[FUNd]

Also, 90% of the business owners in America .. Never even heard of a Cash Advance.

You don't really believe that, do you?

[isaacdstern]

http://finance.yahoo.com/news/pomera...000125188.html

Pomerantz Law Firm Announces the Filing of a Class Action Against On Deck Capital, Inc. and Certain Officers -- ONDK

[Michael I]

Isaac any update on that or is it just lawyers trying to find issues when there is nothing there ?