it all doesnt matter!! The business model has completely changed now… from no loans on the books with no risk to subprime loan with all the risk… aka subprime bank! Reset of valuation and risk management necessary!
My understanding is that the R&D loan process is not new.
Another poster mentioned we likely never saw the personal loan version of this, because it likely occurred pre-IPO.
The R&D loan process makes sense. They need to “prove” their models before banks/CU’s will move forward with their products.
I think the drop in price is simply due to the dropped guidance. I think the drop in price is overdone, but I understand there being a drop. Mgmt changing guidance after 1Q, when there isn’t a ton we are seeing today that wasn’t already obvious 3 months ago (Fed poised to raise rates, Russia/Ukraine, end of stimmy checks, etc…) doesn’t fill me with confidence in UPST mgmt’s ability to forecast accurately, let alone in providing consistent beat-n-raises all year long.
You are left with company actually more akin to a value play than a growth play, which isn’t what this board is really about. Granted, if they don’t reduce guidance further in coming Q’s, their 2H of 2022 may be flat sequentially, but it will still be 30%ish growth y/y.
What you have now is a long-game of: what will they be worth IF auto does start executing by EOY or early 2023 as planned, creating a new growth curve. It may very well make the current price in the $30s be an easy double. On the other hand, could they fall further? I don’t know. At a $3b mkt cap, they are still forecasting $1.25b in rev, for a sub-3 P/S.
But if you are working at UPST, and viewed stock comp as part of your package, that isn’t too exciting at moment. So will the company be diluting stock like crazy to retain and attract new talent? Not sure.
Overall, a crappy picture. But I am not worried that much about their loans, as they aren’t trying to be a bank - they are trying to establish data on new products to sell to banks.
I don’t see the point of selling the shares I have at moment, as it is more likely to bounce off a floor here. But not sure I will wait around for the next ER either.
Dreamer