Questions swirling around LendingClub Corp.’s leadership shakeup this week are threatening to compound a concern already weighing on its stock: Will investors keep snapping up its loans?

In interviews, people in the business of buying debts from its platform said Tuesday the company hasn’t adequately explained what prompted the shakeup, causing some to consider scaling back or delaying purchases. Separately, Jefferies Group and Goldman Sachs Group Inc. are holding off, at least temporarily, on buying LendingClub loans they planned to bundle into new securities, people with knowledge of that situation said.

LendingClub had surprised the market Monday by announcing its founder and chief executive officer, Renaud Laplanche, resigned after an internal review into two incidents: The firm’s staff altered application dates on $3 million of loans before their sale, and the CEO failed to disclose his interests in a fund that LendingClub was considering investing in. The stock has plunged 42 percent since then, closing Tuesday at less than a third the price of its initial public offering in 2014.

Under acting CEO Scott Sanborn and newly named Executive Chairman Hans Morris, staff has been working long hours on phones to reassure investors in the loans, according to a person with knowledge of the matter.

“We know that we have a lot of work ahead of us to just have one-on-one conversations with investors,” Chief Financial Officer Carrie Dolan told analysts shortly after the disclosures on Monday.

‘Hard Conversations’

Still, as Tuesday wore on, at least one longtime buyer, speaking on the condition of anonymity, expressed frustration about a continuing wait for more complete information on what happened. Some analysts said they, too, were struggling to understand why Laplanche’s exit was necessary and whether there’s more bad news to come. And officials at other lending platforms said they were keeping close tabs on investor sentiment, anticipating they might benefit from LendingClub’s stumbles.

“There are going to have to be a lot of hard conversations between Scott and Hans and all the buyers to ensure them that all the issues were found,” said Matt Burton, the CEO of Orchard Platform, which provides loan data to big investors.

Institutions that Lending Club and other online marketplaces are vying to attract “have a really high bar when it comes to systems and compliance,” he said. “We’re a new industry and still have a ways to go on that.”

Steve Swasey, a company spokesman, declined to comment for this story.

‘Bad Delivery’

LendingClub and its competitors match borrowers with people who want to finance them over the Internet. The ventures have been struggling recently to shore up investor confidence in their ability to quickly vet borrowers and set interest rates that reflect risks. That’s key to maintaining the young industry’s rapid growth.

By the end of Tuesday, at least seven analysts had cut their recommendations this week for LendingClub’s stock. Only six of 19 tracked by Bloomberg still recommend buying it.

“The more we learn, the less we understand about the actions taken by the board,” Henry Coffey, an analyst at Sterne Agee CRT, wrote in a note to investors after cutting his rating to “underperform.”

LendingClub bought back loans with altered dates from the buyer, Jefferies, and could’ve handled the incident internally as a “bad delivery,” he wrote. Laplanche’s other alleged sin stemmed from his investment in a fund that bought LendingClub’s own products. “Again why was this not simply treated as a misstep in disclosure?” Coffey wrote.

‘Tide Turning’

The scandal landed at a precarious time for online loan platforms after their explosive growth. U.S. regulators have been increasingly scrutinizing the industry. On Tuesday, the Treasury Department released a study, saying the ventures need to be more transparent about practices and subject to additional government oversight. At the same time, many buyers have been reassessing the quality of the loans.

Blue Elephant Capital Management, an investment firm that has securitized loans from Prosper, hasn’t bought significant amounts of online loans to consumers since September, said Brian Weinstein, a managing partner. Back then “we thought low rates and high volumes would lead to trouble,” he said.

With LendingClub potentially spooking other investors, his firm is looking for an opportunity to dive back in, he said. For example, bonds already issued may become cheaper, or the platform may have to boost interest rates.

“The tide is turning in favor of loan buyers,” said Weinstein. “If nothing else, this will refocus marketplace lenders away from maximizing volume and toward better underwriting standards.”

Orchard’s Burton predicted that many experienced buyers will ultimately stick around, as long as the quality of loans holds up. But the turmoil at LendingClub could turn off new sources of funding that the company and others are counting on.

“The question is, are they going to be able to acquire the capital they need for the growth plan that they have?” he said.