I think you are missing the point. If their costs were fixed, volume would lower costs. But they did not build a factory or a cellular network with huge up-front expense. Their costs are almost all variable. And if you have variable costs, you can't grow your way to profitability. Your costs will increase as fast as your revenue. Just look at the financial statements.
And costs are going up. Getting a top spot on Google Search will cost more money with more competition. Click through rate should be the same, so cost per loan will go up.
I think the shorts are piling on because WTW might go bankrupt. There is not way the company can repay the $2.25B in debt it has on the balance sheet. The interest expense eats up all the operating profit, so there is no cashflow for the principal payments.
The management ended up bankrupting the company to try and prop up the share price so they could earn bigger bonuses. However, I am sure they will still "retire" as multi-millionaires, while some private equity company will snap up the debt for $0.50 on the dollar and make a killing with a reduced debt payment and some better management.
Save your money until the private equity company IPO. That is your bet investment in WTW.
If Lending Club's marketing expense (cost to acquire a loan) is greater than their revenue (origination fee from the loan), how do they grow their way to profitability? And competition is only getting more intense with a host of new entrants.