UPST - this is the UPST thread

Given the limited search abilities on current boards, I think the UPST dialogue was getting lost in my never-ending Dreamer Corp Shareholders update thread.

Figured I would offload it here for easier access down the road.
Last few salient points:

The company won’t holds loans in the future but it will be at the expense of revenues. According
to management, this should only happen in times where loan pricing is fluctuating quickly. But should
it happen, it might mean missing guidance. Not sure what is worse.

Agree, don’t like that response.
The market didn’t like hearing that the amount of loans on the book could go up in future, rather than be quickly sold on. The answers in the CC by David confirmed this could happen.
If they’re absolutely confident that all they’re doing is greasing the wheels very short term before selling the held loans, then continue doing so and ignore the short term market gyrations. Prove that you can easily sell on these loans and all is fine. Market just didn’t like how these loans could potentially stay on long term.

Quite simply, you continue as you are, you have 400 million loans on your books and you tell the market during the CC you have not held a single loan more than 30 days.

But they’re not confident, so they just stop greasing the wheels.

  • Ben Dubya

There was some discussion on the call last week about improving their models to better reflect
loan pricing volatility. Apparently this was something they already were working on and plan to speed
up. So it’s not a given that revenues will be materially impacted if they limit non-R&D loans on the
balance sheet.



I also heard that and your point is valid. How it stands today is the same situation would mean less revenue. Maybe they will be able to tackle the issue in the future. We shall see.

I’m also long UPST and underwater.



I forgot to mention the real thesis.

I believe UPST will be a much, much larger company in the future such that the returns will be excellent.


I forgot to mention the real thesis.

Yeah, if your viewpoint is speculating on price then the noise in the last week or so is likely of
some concern. But if your viewpoint is as long term owner of a business, then it’s just noise. The
thesis hasn’t changed. This is a nimble management team with a hefty ownership stake. Long term
they should deliver excellent returns.



UPST!!! Mega nonsense!!!

  1. Jonwayne. 3 thesis points “broken”. a) not hypergrowth. Well, my God, take it out back and shoot it. b) Not asset light. Not true. UPST made a choice between growth and balance sheet. It is a choice. They don’t have to take the loans. If they don’t, and if there is no securitization money available, then the loans stay with the banks which then do not have capital to make new loans. 3) no better than FICO. What!!!??? The KBRA projections are KBRA’s. They started off over-predicting defaults. They obtained data and adjusted. Stuff changed. But KBRA are two abstractions away from the UPST model. FICO, UPST, KBRA rating/estimates, reality.

  2. Loans on the balance sheet. This is what I was concerned with when I looked at KBRA reports. Not the delinquency, the volume. The volume wasn’t there. It was a yellow light that I should have read as red. I over indulged in the details of securitization when what mattered was right on the platter. I thought the loans had not been made (low volume). A triple-whammy. The securitization financing was not there, the loans should not have been made, but they were and they went on the balance sheet. BUT, if the price pop on Tuesday was because UPST swore off the balance sheet sauce, that is form over substance. Shame on you, Mr. Market. Perhaps there was a chaser of short squeeze? What will Wednesday bring? I am predicting a wee bit of retracement.

On Tuesday I had about half of my 33% target allocation. I had 4 choices lined up: a) sell it all, big trade buy if back lower. b) hold it. c) increase to target allocation. d) back up the truck. A fifth choice as to sell the 200 shares of trading position, which I did. And I did f), none of the above. I sold 20% and went to bed, to rise and shine with the 20% pop, right back where I started.

Investing psychology is a bitch, particularly when you sacrifice your long term to the worship the volatility.


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I sold them yesterday, so you are welcome for today’s continued upward rampage.


I am torn, because I do think long-term this is back to $100+, but I also love POMO and can’t stand not buying near a bottom.

My reasons for selling most of UPST in 20s/30s was I had concerns that their stock was truly a broken toy. Stock comp for employees would all be out of whack and under water and morale would be shot, etc etc… And I didn’t trust (and still don’t) that their next ER won’t also be bad due to macro.

Should have held and recouped a good chunk of the losses. Double grrrrr!