Why Upstart Dropped 13% in April
Shares of fintech Upstart (NASDAQ: UPST) fell 13% in April according to data provided by S&P Global Market Intelligence. There wasn't any news about the company, but as a bank-related business, it felt the impact of the banking crisis.
After dropping 91% in 2022, and even more from highs in 2021, Upstart stock has more or less stabilized in 2023. It was moving up with rising investor confidence at the start of the year, but as the situation with SVB Financial Group's Silicon Valley Bank unfolded and rippled throughout the banking sector, Upstart stock began to drop again.
Upstart is not a bank; one of its original selling points for investors was that it's meant to be used as a platform for banks to assess a borrower's credit risk, and although it's affected by economic trends, it doesn't have exposure to credit risk like a bank does. However, things have changed. Already last year, it began to hold more loans on its books, which management explained was an experiment of sorts. More recently, it has had trouble selling its loans to the large institutions that typically buy these types of loans and bundle them as debt instruments.
Source Fool.com
