Did Upstart Make a $178 Million Mistake?
After its initial public offering in December 2020, Upstart Holdings (NASDAQ: UPST) saw its stock price soar as investors fell in love with the company's artificial intelligence-based lending platform. Growth was impressive, and the focus was on how quickly Upstart could gain market share in various massive lending verticals.
But despite its early hot start in the public markets, the fintech stock has come crashing back to Earth thanks to ongoing struggles with the business. Making matters worse is the fact that management made what I believe to be a head-scratching mistake last year. Let's take a closer look.
In 2021, Upstart's business was firing on all cylinders. Loan volume and revenue increased 338% and 264%, respectively, that year, spurred by a favorable macro backdrop and lending environment. And Upstart was able to post a profit of $135 million. This helps explain why the stock was up nearly 10-fold at one point in 2021.
Source Fool.com
