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GreenSky exploring strategic alternatives, suspends guidance; shares plummet

GreenSky Inc. is exploring strategic alternatives and has suspended its earnings guidance.

Chairman and CEO David Zalik said the board and senior management have begun the review and retained FTP Securities LLC and J.P. Morgan Securities LLC as financial advisers and Cravath Swaine & Moore LLP and Troutman Sanders LLP as its legal advisers.

Strategic reviews sometimes result in a sale or wide-ranging changes to a company's capital plan or structure. GreenSky is suspending its financial guidance while the review is underway.

The company's shares were down about 19% in pre-market trading on Aug. 6.

The company reported a sharp jump in earnings for the second quarter, however. It reported second-quarter net income attributable to the company of $12.3 million, or 19 cents per share, up significantly from $5.6 million, or 9 cents per share, in the year-ago quarter.

The S&P Global Market Intelligence consensus GAAP EPS estimate for the second quarter was 24 cents.

"Notwithstanding the Company's solid operating results, in light of the complexity of the company's operating model, we do not believe that the company's current market value is reflective of the company's strong record of cash flow generation and intrinsic value," Zalik said.

The company recorded pro forma net income of $33.6 million in the second quarter, compared to $33.5 million in the year-ago period.

Total revenue for the quarter stood at $138.7 million, compared to $105.7 million in the year-ago period. Transaction fee revenues grew year over year to $108.4 million from $90.2 million, and servicing and other revenues increased year over year to $30.3 million from $15.5 million.

GreenSky reported second-quarter transaction volume of $1.58 billion, up 20% from $1.32 billion in the year-ago period.