Print

[Fred93]

Fred keeps updating the damn blog.  Tonite's installment is a regular monthly update, with a few lamenting words about Chris Larson, E-Loan, and Prosper.com .  

The meat...


Oh, note that one of the monthly cohorts has now reached 40% gone bad!

[xraider]

Thanks, Fred.  These numbers are always depressing.

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

[ira01]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

[Urbi_et_Orbi]

Thanks, Fred, as always, for shining a bright light into the dark corners.

[Mark12547]

Thanks, Fred, for keeping up your charts!

I bet Prosper Marketplace, Inc., doesn't want the 40% number published! Too bad they drove lenders off their site so Prosper lost the ability to respond at the same place where the Pninen Charts appear. If someone at Prosper looked back, they might regret having driven lenders off their official boards, resulting in the truth printed in forums that end up being crawled by Google and other search engines.

With these numbers, I wonder if Prosper will ever have enough originations to break even, if they ever reopen.

[ira01]

With these numbers, I wonder if Prosper will ever have enough originations to break even, if they ever reopen.

I think the answer to that is quite clearly "no."  As we saw (and as I wrote about on my blog), originations had flat-lined at Prosper long before they were forced to shut down.  Those originations were massively lower than what was needed to break even (by probably around 300%).  Now performance is even worse than it was, Prosper is under the cloud of the class action, and the restrictions Prosper 2.0 will probably have to operate under (only allowing high-income/net-worth lenders, only lenders in certain states, and Prosper 2.0 owning future notes with "lenders" being mere unsecured creditors of Prosper), all adds up to Prosper 2.0 being a non-starter IMHO.

[bankomatic]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

How are they losing money since they don't have default risk? Also, the 40% default number is staggering. I wouldn't have guessed it be that high.

[cubbiesnextyr]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

How are they losing money since they don't have default risk? Also, the 40% default number is staggering. I wouldn't have guessed it be that high.

They're losing money from an operating standpoint.  $30M of operating losses.

[112233]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

How are they losing money since they don't have default risk? Also, the 40% default number is staggering. I wouldn't have guessed it be that high.

They're losing money from an operating standpoint.  $30M of operating losses.

Which is VC money. I think they hoped to have this lipsticked pig sold by now.

[bluestar148]

Oh my! The trend continues upward. "Never LEND MONEY to strangers over the internet."

[bankomatic]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

How are they losing money since they don't have default risk? Also, the 40% default number is staggering. I wouldn't have guessed it be that high.

They're losing money from an operating standpoint.  $30M of operating losses.

I haven't seen their operating expenses, but they should be making money on origination fees and don't they take a chunk of the interest rate on every loan? I would like to see why it's so expensive to operate prosper.

[ira01]

Your charts confirm my experience: Prosper should never come out of its quiet period.  It seems that the only people who make money on this site, as a rule, are Prosper itself and the borrowers.

Not Prosper itself -- it has lost more than $30 million so far.  Of course, that's less than the lenders' losses. 

How are they losing money since they don't have default risk? Also, the 40% default number is staggering. I wouldn't have guessed it be that high.

They're losing money from an operating standpoint.  $30M of operating losses.

I haven't seen their operating expenses, but they should be making money on origination fees and don't they take a chunk of the interest rate on every loan? I would like to see why it's so expensive to operate prosper.

Lots and lots of $100K+ employees. 

Prosper has blown through $30-$35 million of VC already, maybe even more by now.  Its expenses dwarf its income from origination and servicing fees (which have been calculated and posted in various threads here).  Somewhere around October 2007, Chris Larsen publicly announced at the Hawaii M&G that originations would need to increase 400-500% for Prosper to break even.

[Fred93]

I haven't seen their operating expenses, but they should be making money on origination fees and don't they take a chunk of the interest rate on every loan? I would like to see why it's so expensive to operate prosper.

Not enough volume.  You can estimate the cash in pretty well, 'cause you know the #loans and $ value, etc.  Outflow = 30 or so employees + rent, legal, etc etc.  

See their S1A filed at www.sec.gov .  Search by company name, and enter "prosper marketplace".  It contains full financial data.

[jussenadv]

mar = 05/01/06?  I assume numbers are correct, so 1st line is in fact May?

[112233]

it takes at least a month 2 months for a loan to be 1 month late

ETA (thanks fred)