Fintech Firm GreenSky Explores Possible Sale

By Peter Rudegeair

Online lender GreenSky Inc. said Tuesday that it is exploring a range of strategic alternatives, a humbling turn for a high-growth financial-tech company that made a splashy debut on public markets just over a year ago.

Shares in the Atlanta-based company fell as much as 34% to $6.81 in morning trading following the announcement of a potential sale or merger in addition to a second-quarter earnings report that missed analysts' expectations. GreenSky said that profit fell 4% to $39.2 million, or 19 cents a share, from a year earlier on revenue of $138.7 million.

GreenSky makes technology that allows Home Depot Inc. and more than 16,000 merchants to offer consumers loans to fund home-improvement projects and medical procedures. Unlike LendingClub Corp. and other online lenders, GreenSky has been profitable for years and generates the bulk of its revenue from fees it charges merchants.

Though it positions itself as a technology company, GreenSky depends on a small number of banks to fund nearly all its loans. One of those banks, Regions Financial Corp., said during the second quarter that it wouldn't renew a funding commitment to GreenSky, spooking investors.

"We believe that the company's current market value does not reflect the company's intrinsic value," Chairman and CEO David Zalik said on a conference call with analysts. Valued at more than $4 billion at its May 2018 public listing, GreenSky shares had plunged by two-thirds through late morning Tuesday.

GreenSky said it retained FTP Securities LLC and J.P. Morgan Securities LLC as its financial advisers, and Cravath, Swaine & Moore LLP and Troutman Sanders LLP as its legal advisers.

Other online lenders are also falling out of favor among investors. Shares in On Deck Capital Inc. fell as much as 23% one day in late July after the online lender said that JPMorgan Chase & Co. was winding down a three-year-old small-business lending partnership.

--Michael Dabaie contributed to this article.

Write to Peter Rudegeair at Peter.Rudegeair@wsj.com

(END) Dow Jones Newswires

August 06, 2019 12:04 ET (16:04 GMT)

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