New York-based OnDeck’s shares dropped by over 22 per cent on Monday July 29 after its second quarter earnings disappointed investors.
The online loans provider for SMEs saw its shares slide after missing the earnings expectations by $0.02. The adjusted net income ended at $6.9m, $0,09 per diluted share. The company’s gross revenue was $110.2m.
OnDeck stockholders’ equity of $314m increased by $7m, or two per cent, from the first quarter of 2019. It also increased by $44m, representing a 16 per cent jump, compared to 2018.
Part of the disappointing results was because JPMorgan Chase, the banking corporation, had recently revealed it would no longer be originating new loans on OnDeck’s platform. “While disappointing, we appreciate that Chase recognized at a very early stage the opportunity to serve small businesses through online lending, and that our technology and platform were the right tools to support their efforts,” Noah Breslow, CEO of OnDeck, reportedly said at an earnings call with analysts.
Nevertheless, Breslow stated that he and OnDeck’s team were “excited about our opportunities to create value for shareholders and our board has authorized a significant stock repurchase program in recognition of our strong liquidity and capital positions.”
He added, “Further, after careful consideration and analysis, we have decided to pursue a bank charter, which will enable us to offer our small business customers a wider range of products while improving our financial profile.”
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