Dan Loeb & Third Point Invest in UPST

Investment Analysis Clubs Saul’s Investing Discussions
1

I have not been able to post about this company due to the Motley Fool trading restrictions - now that I have a full position in place here is some info that I thought was interesting related to Dan Loeb’s Third Point Capital.

Third Point Capital (Dan Loeb) made a filing that it owned 12,181,222 shares of Upstart on December 15, 2020 - the filing was required as the company owned 10% or more of UPST. Then the quarterly 13G filed on Feb. 12th for the quarter ending Dec. 31st stated the fund owned 13,381,222 shares. This past weekend I saw the most recent filing from Third Point for the quarter ended March 31st - the fund still owned all 13,381,222 shares. If you look at a price chart for UPST for Q1 of this year you will see that the shares traded as high as $165 intraday on March 22nd and Third Point held all its shares. According to Whale Wisdom as of the end of Q1 Third Point had 11.38% of its fund invested in Upstart - its biggest holding. (We do not know if any shares have been sold since March 31st by Third Point.)

Links:

  1. Whale Wisdom percent of fund invested in UPST (March 31)
    https://whalewisdom.com/filer/third-point-llc

  2. Initial Third Point Position 12,181,222 shares
    https://www.sec.gov/Archives/edgar/data/0001040273/000156761…

  3. Additional Share Purchase Bringing total to 13,381,22w
    https://www.sec.gov/Archives/edgar/data/1040273/000156761920…

  4. May 14, 2021 13F filing
    https://www.sec.gov/edgar/browse/?CIK=1040273

Link to holdings as of March 31 contained in May 14th filing (click on little box that says “filing”)
https://www.sec.gov/Archives/edgar/data/1040273/000108514621…

I made a lot of money investing around Loeb’s thesis for YAHOO! being a sum of the parts story which gave investors access to Alibaba on a pre-IPO basis. The quarterly numbers from this company were fantastic and the fundamentals as a pick 'n shovel play wonderful - thought the Loeb investment angle added to the story.

Frank - long UPST, see profile for all holdings

43 Likes
2

Seems bullish but wonder if they are restricted from selling due to the lockup date?

3

Seems bullish but wonder if they are restricted from selling due to the lockup date?

My guess is that Third Point may be restricted based on what I just read in its Q4, 2020 Investor Letter dated February 10, 2021. On page 6 you can see a writeup on Upstart. Well worth reading. (links at end of post)

In 2015 Third Point invested in the Series C round of financing for the company when it was at $145 million valuation. All of its stock was bought at that time except for 1.2 million shares that were purchased at $20/share as part of the IPO. Today Upstart is valued at over $10 billion.

Here is something I consider a very useful piece of information around Third Point’s investment:

From Third Point’s Q1 Investor Letter dated May 6, 2021 - page 2 last paragraph.

…or sourcing loan pools from Upstart for our structured credit portfolio;…

They are purchasing Upstart loan pools and therefore can see how the underlying loans are performing. The initial involvement with Third Point and Upstart goes back to 2015 when Third Point began looking at the loan pools it could buy based on Upstart’s lending model.

Third Point also has a representative on Upstart’s board of directors. you can see this at the Upstart investor relations website under “Governance” and then “Board Directors”.

https://ir.upstart.com/investor-relations

Mr. Schwartz has served as a member of our board of directors since June 2015. Since June 2000, Mr. Schwartz has been Managing Partner of Third Point Ventures, the Menlo Park, California based venture capital arm of Third Point

Link to Third Point Q4, 2020 investor letter - dated February 10, 2021

https://d2gr5kl7dt2z3t.cloudfront.net/blog/wp-content/upload…

Link to Third Point Q1, 2021 investor letter - dated May 6, 2021

https://thirdpointlimited.com/wp-content/uploads/2021/05/Thi…

Frank - long UPST, see profile for all holdings

29 Likes