One of many possible “reasons” for the UPST dip yesterday could also have been that an investor with over 200k followers on Twitter (Puru Saxena) announced that he was exiting his position. I was watching yesterday and the price began to flounder close to the time yesterday morning that he posted, “my gut says there is something not quite right with one of my companies” and he might have to get out. That set off a craze of speculation on his timeline (he makes his holdings public), with most deciding it must be UPST, and the price started to really go south. He then confirmed it almost 12 hours later.
In the end, he couldn’t really identify a problem, he just never understood the advantage they had, thought their growth estimates (from the GS report) were too weak from 2022 onwards, and therefore sold.
I don’t think that accounts for the whole swing, by any means; UPST is like a bucking bronco with its share price. But I also don’t think that announcing to over 200k followers that you’re selling a position–an announcement that was teased and hyped unnecessarily for almost 12 hours first–would have no impact at all.
UPST is my largest position.
Regarding your mention that some random retail investor with lots of twitter followers sold UPST:
I’m sure you agree that it is meaningless noise.
We should not care why retail investors sell stocks we hold.
They do not carry intimate knowledge of the business.
If business fundamentals have changed, that’s another matter. Earnings reports and guidance matter the most. The only time I would consider exiting a position because someone else sold, is if heavy insider selling occurs. As insiders may know something we may not.
However, we know at this point that this is not the case for UPST so far.
We’ll have to define ‘insider’ as any director, senior officer, entity, or individual that owns more than 10% of a publicly traded company’s voting shares. Because if they make any transactions, they must file a Form 4.
We know for UPST, there have been exactly ZERO SEC Form 4 filed since IPO lockup expiry last month indicating any insider selling.
I actually see this as a very good sign, as Third Point’s billionaire Dan Loeb holds about 14% of UPST shares. As they own >10%, they must file SEC form 4 for any transaction.
Third Point holds 12.2 million shares at a cost basis of $2/share, and they actually averaged up by purchasing an additional 1.2 million shares at IPO last year for $20/share.
When IPO lock up expired, Third Point could have sold some shares to lock in a tremendous seventy-bagger gain. I would not blame if they did, but they really have not sold a single share!(at time of this writing, at least).
I think this speaks volumes about Third Point’s confidence in UPST’s long term execution and growth. I currently share their same sentiment, unless business fundamentals negatively change in the future.