LendingClub (LC) is down over 3% today as the Wall Street Journal broke a story suggesting the notes on the online lending platform had a bad performance in April. According to the article, Broad Based Consumer Credit Fund run by LendingClub unit LC Advisors generated a small 0.12% return for the month. The return was the second-smallest in the five-year history after the 0.1% return in January. The news initially sounded dire until digging into the details and one wondering why a coincident existed that the worst two monthly performances were the first months of a new quarter. As usual, the devil is in the detail. The weak results weren't due to the performance of the underlying notes on the platform, but the valuation adjustments required from holding existing loans in a fund. As rates rise, the loans have less value if one wants to sell the loans. Again, this isn't a LendingClub problem, but a fixed income issue. Another issue that has propped up is a greater focus on five-year loans due to apparent less availability of shorter-term loans. Oddly, the five-year loans have had higher returns though the market views them as more risky. The biggest concern with the stock is that the negative news cycle causes more people to pull out from the platform. Stay tuned for more... Disclosure: No position