LoanDepot considering reviving public offering

Register now

LoanDepot Inc. is exploring the possibility of reviving a stock offering, according to a person with knowledge of the matter. The mortgage lender aborted plans for an initial public offering in 2015 just hours before pricing,

The planning is in the early stages and the company isn't ready to lay out a time frame for any IPO filing, said the person, who asked not to be identified because the talks are private.

Julie Reynolds, a spokeswoman for Foothill Ranch, Calif.-based LoanDepot, declined to comment on an IPO plan.

In 2015, the company had targeted a market value of $2.4 billion to $2.6 billion at the IPO based on the $16 to $18 marketed share price range with 147 million shares outstanding after the offering.

LoanDepot's previous attempt to go public didn't go smoothly. The company initially filed to sell shares in October 2015. It changed chief financial officers within three weeks in an unusual move for a company seeking a stock offering, and the first in a string of events that led to the deal being pulled.

On Nov. 12, the day that LoanDepot expected to price its IPO, a person familiar with the offering said that the deal was at risk of pricing below its offer range. Chief Executive Officer and founder Anthony Hsieh withdrew the deal from the market that same evening.

Several days later, Hsieh cited weak market conditions and said he aborted the IPO, in part, after watching valuations fall for other fintech lenders, specifically naming LendingClub Corp., a competing lender that had extended trading losses for three days running up to the LoanDepot listing. LendingClub had just raised $1 billion in its stock sale the year before. Hsieh didn’t rule out another IPO attempt in the future.

LoanDepot has sought to grow bigger since pulling the offering, and has worked to develop newer products, including unsecured personal loans, a venture that has produced some disappointments. Ellington Financial, an initial investor in the loans, stopped buying them after their performance fell below expectations and attempts to correct the weakness failed, a person familiar told Bloomberg in February.

The mortgage company has also worked to implement new technologies that it says will give it a leg up on traditional home lenders. It recently launched a new digital lending platform, part of an $80 million investment in technology over the last 18 months. The platform, which provides a fully digitized mortgage loan application, is designed to make loan making processes more efficient and cheaper for consumers, according to a press release.

Bloomberg News
Stocks Wholesale lenders Consumer direct Originations Underwriting LoanDepot Lending Club
MORE FROM NATIONAL MORTGAGE NEWS