Dan Loeb and Upstart

There has been lots of hand-wringing about Dan Loeb and Third Point abandoning Upstart. I’ve even read that led to many people (not necessarily on this board vacating their positions.

The real story is that Upstart remains Third Point’s top position and has been the source of incredible wealth for Loeb and the firm.

Upstart Holdings (UPST): UPST is currently the largest position at 21.42% of the portfolio. Third Point’s original position goes back to a Series C funding round in 2015 when the business was valued at ~$180M. They also added 1.2M shares in the December IPO. UPST started trading at ~$44 and currently goes for ~$172. This quarter saw a ~7% trimming.

Note: They have a ~15% stake in Upstart Holdings and are sitting on gains of ~20x from ~$206M in total investments (~$66M six years ago and ~$140M at IPO). Their Q3 2021 letter had the following regarding this position: Upstart has started to upend FICO-dependent unsecured personal loan market with its AI-driven underwriting approach – also ramping up for the $685B auto lending market. The momentum is validated by the ~25% full-year guidance increase.