Shares of LendingClub Corp. tumbled 8.1% in active afternoon trade Monday, after the online credit marketplace disclosed it was raising interest rates to lenders in response to increased delinquencies. The selloff put the stock on track for a fifth-straight loss to 2 1/2-month low. Volume of 13.7 million shares was more than double the full-day average. In a filing late Friday with the Securities and Exchange Commission, the company said it was raising rates by a weighted average of 0.26 percentage points, as it has continued to observe higher delinquencies, an increased propensity to accumulate debt and lower credit scores. "Although the trend can now be observed across grades, it is less notable in lower risk grades and more notable in higher risk grades, particularly grades E, F and G, which account for approximately 12% of platform volume," Chief Investment Officer Siddhartha Jajodia wrote in a letter to investors. The stock has now plunged 55% year to date, while the SPDR Financial Select Sector ETF has slipped 0.3% and the S&P 500 has gained 4%.
Copyright © 2016 MarketWatch, Inc.
Continue Reading Below