Dealers, beware. Wall Street likes the idea of an online substitute for an F&I manager.
Even as the Fed promises to push interest rates higher, LendingTree Inc., an online lender providing direct-to-consumer car loans and mortgages in Charlotte, N.C., flourished the day it went public and continues to trade above its initial public offering price.
LendingTree (Lendingtree. com), which trades on Nasdaq under the symbol TREE, raised $43.8 million in an initial public offering by selling 3.65 million shares, or about 20 percent of the company to the public, at $12 a share Feb. 16. In its first day of trading, the stock price shot up as high as $21.
The real test, of course, will be whether consumers become accustomed to applying for loans over the Internet. In its infancy, online credit application has grown slowly because of concerns about privacy and Web security. Recent attacks on large business-to-consumer Web sites could feed some of those fears.
But the LendingTree's concept has what many consumers want in an online service. LendingTree shops the loan application to multiple lenders and lets the consumer choose the most competitive rate. Online shoppers like control over the transaction and enjoy a competitive bidding environment.
In other dot-com news:
Science Applications International Corp., owner of the Automotive Network eXchange, or ANX, which provides a secure trading network for automakers and suppliers, is talking to two manufacturers about putting their dealer communications on the ANX network.
AutoTrader.com, an online used-car marketplace, has joined forces with Greenlight.com, an Internet auto-brokering service partially owned by Asbury Automotive Group, to offer new vehicles for sale on its site.
Esurance Inc., an online insurance provider, has entered an agreement with Autobytel.com, an online auto-buying service, to offer auto insurance through the Autobytel.com Web site.
Donna Harris can be reached at [email protected] or at (202) 662-7218.