On a recent edition of CNBC's "Mad Money," host Jim Cramer interviewed the chief executive officer of LendingTree, Inc. (Nasdaq: TREE), Douglas Lebda, where the two discussed the fintech company's most recent "blowout" quarter, where the firm reported earnings per share of $0.87, while street expectations were $0.77, as reported by Yahoo Finance, a 12.9 percent beat. Mr. Cramer stated his view that Federal Reserve Board Chair Janet Yellen will likely raise the federal funds rate this week, and possibly several more times through 2017, and asked how this might affect financial-technology companies like LendingTree, who doesn't lend money itself, but depends upon transaction "volume" to generate revenue.
TREE stock is up more than 34 percent over the past 12 months, and over 19 percent year to date. Jim Cramer asked if the TREE stock run can continue, with higher interest rates on the way, possibly scaring borrowers, and driving customers away. Cramer congratulated the CEO with the timing of a purchase of TREE shares, near the time he last appeared on Mad Money. Mr. Lebda stated that he was able to recognize a "dislocation in the market," where TREE shares were being sold, for no apparent reason. Cramer reminisced about the CEO's words at the time, that the stock "is not correct."
LendingTree CEO sees home-equity loan transactions doubling or tripling
Doug Lebda stated that he saw the home-equity loan business tripling in 2017.
When Cramer questioned the CEO, he responded that they would "triple... maybe double." The "Mad Money" host asked if deregulation related to the administration of President Donald Trump was a factor in the strong home-equity loan growth. The CEO explained that the strong growth was a function of increased homeowner equity, allowing consumers to borrow against it.
In addition to arranging home equity loans and mortgages for consumers, LendingTree offers a selection of credit cards, as well. Mr. Lebda cited an example where a consumer might be able to find a card offering a 12-percent rate, compared with a best rate of 15 percent elsewhere. The CEO expressed concern that lenders like SoFi might try to jump over the company, and offer a direct model, but stated "we've done OK with them."
Doug Lebda: Trump should 'shut his mouth'
Jim Cramer closed the interview by asking Doug Lebda about his prediction that Donald Trump winning the presidency would be "good." The CEO called the president's policies "exactly right," and expressed a view that Trump should "shut his mouth," which caused Jim Cramer to laugh.
Lebda insisted that he still supported President Trump, and cited his health care, military, and appointment decisions as reasons for his support. The CEO stated that President Trump was "delegating" effectively, and then moved into a seeming suggestion that Trump's smartphone be tossed from Trump Tower, with each member of his cabinet having the chance to jump up and down on it, and the possible sale of it for "$10 million for charity."
