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[Dr Evil]

Their filing is due tomorrow (3/31)

[bigmac]

It is now April. Prosper is officially out of business. Everyone lost all of their investments. Class-action lawsuit to follow.

Oh wait. That didn't happen. Instead, they got a $14.7 million investment from some reputable investors.

Since waiting for the inevitable collapse was so much fun, I propose we do it. Let's just push the date back 1 year to April 2011. Prosper will be bankrupt in April 2011. Who is with me?!?

[Fred93]

Oh wait. That didn't happen. Instead, they got a $14.7 million investment from some reputable investors.

Actually, they got $11.4 million new cash.  The remaining $3.3 million counts the stock Prosper issued in conversion of the outstanding bridge loans, which has mostly already been spent.  They add the two together and report the amount of stock they issued in the press release, rather than the amount of money they took in, because it allows them to report a bigger number.

It is interesting to note that Prosper has not released details.  We don't know the number of shares issued for that money.  We don't know how this round diluted the earlier shareholders.  Normally one would expect that a reporting company would file an SEC 8K and tell us this stuff.  While prosper is a reporting company, they seem to believe they don't need to report as much as other companies.  I'm not sure where that puts them relative to the rules.  They have publicly traded debt, but no publicly traded stock.  That's unusual, but not unheard of.  Is there a special rule for this case, or should Prosper have filed an 8K and disclosed the numbers?

[havastat]

Well, the securities laws require disclosure of material facts. Materiality is with respect to the particular security, which in this case is the notes, not Prosper stock. One could certainly argue that while Prosper's total amount of assets, liabilities, and shareholder equity is material to a note-purchaser, the distribution of equity among the various shareholders is not. So long as the total equity amount is disclosed, why does it matter to a prospective note purchaser how many shares are outstanding, who owns them, or whether previous shareholders got diluted?

These things would be material to a prospective stock purchaser, of course. But a note purchaser? 

[312lender]

I like your explanation Havastat.  Are you a lawyer?

[Urbi_et_Orbi]

LendingClub has, of course, filed their 8-K.

http://sec.gov/Archives/edgar/data/1409970/000095012310035971/0000950123-10-035971-index.htm

[Fred93]

LendingClub has, of course, filed their 8-K.
http://sec.gov/Archives/edgar/data/1409970/000095012310035971/0000950123-10-035971-index.htm

And today Prosper filed theirs.
http://www.sec.gov/Archives/edgar/data/1416265/000141626510000169/p8k4d15d2010.htm

Apparently they have a few days to file these things, and they took them.