Alibaba has dominated the IPO headlines since the Chinese e-commerce and digital marketplace behemoth filed for a U.S. initial public offering in May. But it’s the coming share sale of another online marketplace that likely has greater relevance to Americans.

LendingClub, the largest U.S. provider of peer-to-peer loans announced plans Wednesday to raise $500 million in an IPO. Located in San Francisco, clear across the country from the nation’s money hub of Wall Street, Lending Club has gained popularity by focusing on a piece of the financial universe that the banking industry has long neglected: consumer loans.

Families wanting to remodel their homes, take overseas vacations or relocate have been forced to rack up credit card debt at high interest rates, because banks stopped putting forth the resources into underwriting those relatively low dollar loans.

LendingClub and smaller rival Prosper Marketplace invite borrowers looking for loans of up to to $35,000, with more than three-quarters of customers using the funds to consolidate existing debt. For LendingClub’s lowest-risk borrowers, rates on three-year loans start at below 7 percent.

As of the end of June, LendingClub had issued more than $5 billion in loans since its launch in 2007, including over $1 billion just in the latest quarter. If the stock market behaves, LendingClub plans to go public before the Thanksgiving holiday in late November, said a person close to the company. Morgan Stanley and Goldman Sachs are leading the offering.

Here’s what makes it a marketplace. Rather than acting like a bank, which makes money on fees to consumers as well as the spread between its borrowing costs and interest rates charged to customers, LendingClublets outside investors—retail and institutional—buy loans from its website.

After a prospective borrower applies for a loan, LendingClub uses software and lots of data to underwrite the customer and determine if the loan can be issued. If the application makes it through the screening, it’s made available for the investing public.

A retail investor can open an account with a few hundred or few thousand dollars and build a portfolio of diversified loans by putting as little as $25 into each. When a loan gets fully funded, it gets issued to the borrower and LendingClub gets paid an origination fee. LendingClub’s net revenue more than doubled in the second quarter to $48.2 million, though operating expenses surged, leaving the company with a $9.2 million net loss.

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A U.S. government commission warned that investors face “major risks” if they buy shares in Chinese companies like e-commerce firm Alibaba Group Holding Ltd.

The report said the corporate structure of Chinese firms like Alibaba is a ‘highly risky scheme of legal arrangements.’ Reuters

A report released this week by a commission that advises Congress on U.S.-China economic issues took aim at the legal structure underpinning Alibaba as well as a host of other Chinese Internet firms, calling it “a complex and highly risky scheme of legal arrangements.” It warned that the structure could lead to losses by shareholders in the U.S.

“U.S. shareholders face major risks from the complexity and purpose” of the structure, said the report, released on Wednesday by the U.S.-China Economic and Security Review Commission. The group, an independent agency directed by Congress, has in the past issued critical reports about China.

While the commission doesn’t directly make policy, its research can inform the work of policy makers and regulators, from members of Congress to agencies focused on securities listings, acquisitions and the U.S. economy.

For the full article from WSJ, please click here.

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Jack Ma, executive chairman of Alibaba. European Pressphoto Agency

As Alibaba Group prepares for the bright lights of Broadway, it is keeping potential investors in the dark. There is yet time to illuminate things.

The Chinese online-shopping giant is likely to release an updated regulatory filing soon in preparation for an initial public offering in New York, expected to raise more than $20 billion. A pre-IPO document released in May left gaping holes around Alibaba’s business and who controls it.

It seems a bare minimum to identify the more than two dozen partners who will effectively control Alibaba via special rights to appoint a majority of board members. The nature of these partners’ business relationships with Alibaba also should be known. It was a big oversight that the initial filing omitted this information. The Wall Street Journal has reported that the names of the partners will be included in the updated filing.

In addition, investors have complained that Alibaba didn’t break down results for its two moneymaking retail sites, Taobao and Tmall. Last month’s filing emphasized the importance of the Tmall business in the mix of the two. Faster Tmall growth means more revenue per item shipped. A higher Tmall contribution also would bode well for the transition to mobile devices, where it is harder to sell ads.

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