By Corrie Driebusch
Shares of web-based small-business lender OnDeck Capital Inc.
opened at $26.50, 32.5% above their initial public offering price
Wednesday.
The stock recently traded at $27.08 on the New York Stock
Exchange, above where the stock opened.
The big pop comes a week after Lending Club, another alternative
lender, also posted a strong debut.
On Tuesday, OnDeck raised $200 million by selling 10 million
shares at $20 apiece, above its planned range, before taking into
account the overallotment option, which gives underwriters the
opportunity to sell additional shares under certain
circumstances.
OnDeck provides loans to small businesses in the range of $5,000
to $250,000 with terms of three months to 24 months.
Since making its first loan in 2007, OnDeck has originated more
than $1.7 billion in loans and collected more than 4.4 million
customer payments, according to company filings. Most of its
revenue comes from interest income and lending fees earned on the
term loans it retains.
Its business model differs from Lending Club, in that Lending
Club primarily operates as a platform for outside investors to lend
to individuals--a practice known as peer-to-peer lending--while
OnDeck focuses on lending small businesses money from its own pool
of capital.
Despite the differences, fund managers said the success of
Lending Club's IPO helped pave the way for OnDeck's debut.
Last week Lending Club sold 58 million shares at $15 apiece,
above the $12- to $14-a-share range outlined in a filing with
regulators. Shares of Lending Club surged 56% from their IPO price
in their first day of trading. It closed trading on Tuesday at $26,
73% above its IPO price.
The deal was led by Morgan Stanley, Bank of America Merrill
Lynch, J.P. Morgan, Deutsche Bank and Jefferies.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
Access Investor Kit for JPMorgan Chase & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US46625H1005
Access Investor Kit for Morgan Stanley
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6174464486
Subscribe to WSJ: http://online.wsj.com?mod=djnwires