Oct
Prosper Marketplace Enters Quiet Period
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Prosper announced that they are entering a quiet period and will not be accepting new commitments from lenders. This follows on Lending Club’s announcement yesterday that it is coming out of their quiet period. It seems Prosper is interested in having the same form of loans that can be resold which Lending Club announced yesterday.
Overall, both announcements are likely to be a good thing for the P2P lending marketplace. Although, with the current credit crunch and market downturn, Prosper’s timing is not ideal. Many people will be seeking alternative forms of credit and investments over the coming months.
Prosper mentions that they will work to ensure that borrowers can still receive funding so that the platform does not completely dry up during the registration process, but it looks like that funding is not secure yet.
Didn’t a Prosper manager boast around the time of the Lending Club quiet period announcement that the registration could be done without a quiet period if it was done correctly?
The note from Prosper Marketplace about the quiet period:
Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future.
The registration filing is a necessary step toward making the secondary lending market available to the community. This is something many of you have been asking for, and we believe the liquidity of a secondary market will make Prosper even more vibrant.
Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. If you’re an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you’ll be able to track and monitor your loans; and you’ll be able to withdraw funds from your Prosper account.
If you’re a borrower with an existing loan, you will continue with your current borrower agreement and be unaffected by the registration process. If you’re a borrower seeking a loan, you will still be able to create a new loan listing, which we will endeavor to fulfill through alternative sources.
A successful registration can take several months, but we assure you we will do our best to move forward as quickly as possible. Until this process is complete, we’re required to be in a quiet period and will be unable to respond to press, blogger or other inquiries about Prosper or the registration filing until it becomes effective.
We apologize for any inconvenience this may cause, and want to thank you in advance for your understanding and support.
Sincerely,
Prosper
[...] Further coverage at Prosper Lending Review and Personal Loan Portfolio. [...]
I just started using Prosper and this quiet period blind sided me. Did they mention earlier that this was possible, and I missed it? I currently have a bid on a listing, but it looks like the listing won’t get funded now because no one else can place bids. I wish I could just withdraw that bid and my money so I can put my money elsewhere. Instead it’s stuck in this dying listing that has no hope of being funded.
I also have a bid on a listing that ended but is “pending review.” I’m now wondering if this review process (which is says should last “up to 7 days”) will be indefinitely stalled. That is, will my money just sit there doing nothing but still preventing me from withdrawing it?
Heh, I don’t know if anyone out there has these answers, but it seems that Prosper will not be allowed to answer these questions. Too bad they didn’t think to address these situations in the statement they released.
Genette, I think that most people were completely surprised by this. I remember being a little angry at some point after Lending Club announced their quiet period, but that seems to be the modus operandi for the procedure. So I am not surprised by the way it was announced.
It is unfortunate that Prosper has your money stuck in limbo on a loan that won’t fund. They cannot comment on the quiet period or the SEC filing but I do believe that they can respond to customer service issues, so you might want to write them. They need to cut your money free so you can withdraw it. Even if they don’t, you should be able to withdraw it when the listing fails to fund.
I am not sure about the loan in “pending review” status. Again, I’d email them because this sounds like a customer service issue. However, in the case of Prosper “customer service” issues are about “investments” so they may not be able to respond. Hopefully, though if you do email them they will at least respond by taking some action.
Good luck to you.
[...] that Prosper was already in a quiet period and no longer talking bids on loans, this seems like an unnecessary step by the SEC, but they may [...]
How you think when the economic crisis will end? I wish to make statistics of independent opinions!
Prosper must have some serious issues for them to be stuck on hold.
Consider one issue may be the fact that they provide you a performance indicator based on your earnings less any charge offs. But wait, they mysteriously don’t include all the charge offs, artificially bloating (Read that as an intentional overstatement) of your return. Hey, doesn’t the SEC have a word for intentional mis-statement? I think they define it as Fraud.