Latest news with #UpstartHoldings
Business Wire
14 hours ago
- Business
- Business Wire
Upstart Announces Proposed Private Offering of $500,000,000 of Convertible Senior Notes Due 2032
SAN MATEO, Calif.--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST) today announced its intention to offer, subject to market conditions and other factors, $500,000,000 aggregate principal amount of Convertible Senior Notes due 2032 (the 'notes') in a private offering (the 'offering') to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the 'Securities Act'). Upstart also expects to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date the notes are first issued, up to an additional $75,000,000 aggregate principal amount of the notes. The notes will be senior, unsecured obligations of Upstart, and will bear interest payable semi-annually in arrears. The notes will mature on February 15, 2032, unless earlier converted, repurchased or redeemed. The notes will be convertible into cash, shares of Upstart's common stock, or a combination thereof, at Upstart's election. The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering. Upstart intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. Upstart also may use a portion of the net proceeds from the offering to repurchase for cash a portion of its outstanding 0.25% Convertible Senior Notes due 2026 (the '2026 Notes'). Upstart intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include the repayment or the retirement of existing debt, including the repurchase or retirement of the 2026 Notes in the future. In connection with the pricing of the notes, Upstart expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the 'option counterparties'). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of common stock underlying the notes sold in the offering. The capped call transactions are expected generally to reduce the potential dilution to Upstart's common stock upon any conversion of notes and/or offset any cash payments Upstart is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Upstart expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with the option counterparties. Upstart has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Upstart's common stock and/or enter into various derivative transactions with respect to Upstart's common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Upstart's common stock or the notes at that time. In addition, Upstart has been advised that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Upstart's common stock and/or purchasing or selling shares of Upstart's common stock or other securities of Upstart in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during the observation period related to a conversion of the notes, in connection with any fundamental change repurchase or redemption of the notes and, to the extent Upstart unwinds a corresponding portion of the capped call transactions, following any other repurchase of the notes). This activity could also cause or prevent an increase or decrease in the market price of Upstart's common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs following a conversion or during any observation period related to a conversion of the notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the notes. To the extent that Upstart repurchases any 2026 Notes, Upstart expects that holders that sell their 2026 Notes to Upstart may enter into or unwind various derivatives with respect to Upstart's common stock and/or purchase shares of Upstart's common stock concurrently with or shortly after the pricing of the notes. In particular, Upstart expects that many holders of the 2026 Notes employ a convertible arbitrage strategy with respect to the 2026 Notes and have a short position with respect to Upstart's common stock that they would close out through purchases of Upstart's common stock and/or the unwinding of various derivatives with respect to Upstart's common stock, as the case may be, in connection with Upstart's repurchase of the 2026 Notes, if any. This activity could increase (or reduce the size of any decrease in) the market price of Upstart's common stock, which may also affect the trading price of the notes at that time and could result in a higher effective conversion price for the notes. The initial conversion price for the notes will be determined based on the last reported sale price of Upstart's common stock per share on the Nasdaq Global Select Market on the day of pricing of the offering. Upstart cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes or Upstart's common stock. This press release is not an offer to repurchase the 2026 Notes. In connection with the issuance of its 2026 Notes, Upstart entered into capped call transactions (the '2026 capped call transactions') with certain financial institutions including certain of the initial purchasers or their affiliates (the '2026 capped call counterparties'). If Upstart repurchases any 2026 Notes, Upstart expects to enter into privately negotiated agreements with the 2026 capped call counterparties concurrently with the pricing of the notes to terminate a portion of the 2026 capped call transactions corresponding to any principal amount of the 2026 Notes repurchased. In connection with any partial termination of the 2026 capped call transactions, Upstart expects the 2026 capped call counterparties or their respective affiliates to sell shares of Upstart's common stock and/or unwind various derivatives with respect to Upstart's common stock to unwind their hedge in connection with the terminated portion of the 2026 capped call transactions. Such activity could decrease, or reduce the size of any increase in, the market price of Upstart's common stock at that time and could decrease, or reduce the size of any increase in, the market value of the notes at that time. The notes will only be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act by means of a private offering memorandum. Neither the notes nor the shares of Upstart's common stock potentially issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from such registration requirements. This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.
Yahoo
2 days ago
- Business
- Yahoo
Prediction: 2 Stocks That Will Be Worth More Than Upstart 5 Years From Now
Key Points Upstart Holdings has made a recovery but is still a small player in the lending space. SoFi's presence as a comprehensive personal finance platform for individuals should help it expand profits in the years to come. Remitly Global is gaining market share in remittances. 10 stocks we like better than SoFi Technologies › It may seem like a long time ago now, but 2021 was the year of Upstart Holdings. The lending platform grew to a market cap of $30 billion and was aiming to disrupt the traditional pricing mechanisms for consumer loans before it crashed over 90% from all-time highs. In recent quarters, the stock has made a recovery and now sits at a market cap around $8 billion as the company makes progress to go from annual losses to profitability. The stock has come back from the dead, but that does not make it a great buy at today's levels. Here are two fintech stocks that will be worth more than Upstart five years from now, and whether they are buys for your portfolio today. SoFi's attractive proposition The first stock with a more promising future than Upstart Holdings is SoFi Technologies (NASDAQ: SOFI), another highflier from 2020. The online bank has made a sharp recovery and is now generating positive earnings. Last quarter, SoFi's total customer base reached 11.75 million, growing at a 51% compound annual rate since 2021. This led to total revenue growth of 44% to $855 million just in the quarter. More and more people in the United States are adopting SoFi's ecosystem of financial services products that include savings accounts, personal loans, credit cards, and investing. The company's goal is to become a one-stop mobile app for anyone's personal finance needs, and it is now separating itself from the competition. With its much larger scale, the fintech is leveraging its large customer base to generate a healthy profit. Net income grew 479% year over year last quarter to just under $100 million. Today, the stock trades at a market cap of $25 billion, which does not look cheap compared to its price-to-earnings ratio (P/E) of 46. However, the company still has plenty of room to expand its leverage as an efficiently run online bank, meaning that this P/E will come down quickly. SoFi should stay much larger than Upstart and will be a strong stock over the next five years. Remitly's market share gains A stock with a smaller market cap than Upstart is Remitly Global (NASDAQ: RELY). It is a remittance services provider with a market cap of $3.3 billion. Shares of Remitly have fallen in 2025 because of two issues. Immigration changes in the U.S. may present a small but temporary headwind for its growth, but this will likely only end up being a blip on the radar. But stablecoins, which are cryptocurrencies pegged to the value of fiat currencies, could present a long-term headwind for the fintech. However, this narrative isn't supported when looking at the numbers and how people actually interact with remittance providers. People earn money in the currency of the country where they are, and that still requires a remittance provider such as Remitly to send money back to their home country even when using a stablecoin. So the company just announced it will be using stablecoin access to fund an account on its platform. Consumers love Remitly for its ease of use and fees that are lower than the competition's. Revenue grew 34% year over year last quarter to $334 million, with net income of $11 million. Strong unit economics and minimal fixed costs mean that the company can ultimately generate high profit margins, giving it plenty of room to grow earnings in the years to come. With a revenue base of $1.356 billion that is growing like a weed, Remitly has a chance to have a market cap much larger than Upstart if it can keep gaining market share in remittances in the years to come. Upstart's tough path Another reason Remitly and SoFi will be larger than Upstart in five years is the fact that Upstart is going to struggle to generate enough profit to warrant its current market capitalization. For the full year 2025, it is projecting just $35 million in total net income, for a forward P/E of well over 100. It relies on revenue generated by fees made on loans originated through its platform and lending technology but has a bloated cost base with high spending on customer support, technology development, and marketing costs. The company has remained a niche player in the lending space, unable to disrupt traditional methods for generating personal loans. For example, SoFi is much larger than Upstart today. Upstart has a rough path ahead, while the future for Remitly Global and SoFi Technologies looks bright. Include the latter two in your portfolio today and exclude the former. Should you buy stock in SoFi Technologies right now? Before you buy stock in SoFi Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and SoFi Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Brett Schafer has positions in Remitly Global. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That Will Be Worth More Than Upstart 5 Years From Now was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
1 Reason to Buy Upstart (UPST)
Key Points There's a lot to like about Upstart, as its business has grown nicely despite a difficult environment. Upstart's loan data shows that its model does a superior job of predicting credit losses. While Upstart mostly originates personal loans, there's a more exciting opportunity. These 10 stocks could mint the next wave of millionaires › After a turbulent couple of years following the interest rate spikes of 2022, Upstart's (NASDAQ: UPST) business has grown nicely. In fact, despite the persistent high-rate environment and economic uncertainty, Upstart's loan origination volume grew by a staggering 89% year over year in the first quarter of 2025. Upstart's management is calling for the company to produce its first billion-dollar revenue year ever in 2025. Think about that -- not even during the extreme low-interest environment of 2021 did Upstart ever manage a billion dollars. There are other reasons for Upstart shareholders to be optimistic. The company's loan data shows that it does a more effective job of predicting loan defaults than the traditional FICO model. And after several years of losses, Upstart managed an adjusted EBITDA margin of 20% in the latest quarter and is virtually breakeven on a GAAP net income basis. 1 big reason to buy Upstart now To be clear, Upstart's personal loan vertical has been firing on all cylinders. But it's the two newer verticals -- auto loans and home loans, specifically home equity lines of credit (HELOCs) -- that are most exciting. The auto lending market is a massive one that is several times the size of the personal loan industry. And in the latest quarter, Upstart's auto originations were nearly five times what they were a year ago. Mortgages could be the really big opportunity here. Upstart's HELOC origination volume, which launched a little over a year ago, grew 52% sequentially in the first quarter. Combined, auto and home loans make up about 2% of the company's total loan originations today but could end up being the biggest driver of growth. One key statistic worth knowing is that U.S. homeowners are sitting on an all-time high $35 trillion in home equity, and many are just waiting for the opportunity to tap into it at lower rates. Trump's Tariffs Could Create $1.5 Trillion AI Gold Rush The Motley Fool's analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing. Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think . It builds the tech infrastructure that Apple, OpenAI, and others suddenly can't live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move. Continue » *Stock Advisor returns as of August 4, 2025 Matt Frankel has positions in Upstart and has the following options: short December 2025 $95 calls on Upstart. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy. 1 Reason to Buy Upstart (UPST) was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Why Upstart Stock Soared 26% in July
Key Points Financial companies have been reporting growth as interest rates come down. Upstart's revenue doubled in the second quarter, and net income was positive. Upstart stock looks reasonably priced. These 10 stocks could mint the next wave of millionaires › Upstart Holdings (NASDAQ: UPST) stock jumped 26% in July, according to data provided by S&P Global Market Intelligence. The market is getting excited about it again as interest rates come down, and many financial stocks have been reporting robust growth. A better way to approve loans Upstart is a credit evaluation platform that uses artificial intelligence (AI) to approve more loans without adding risk to the lender. In theory, that's a great premise for a company, and Upstart caught investor attention early in its journey when it was reporting triple-digit growth. However, it's had a wild ride over the past few years as it cycles through different phases of the interest rate trends. Interest rates were near zero when it went public, leading to heightened lending activity and ease in approving loans. Rising interest rates put a stop to that, and revenue plummeted, along with the stock price. It looks like it's finally stabilizing again as interest rates come down. However, it's in a much better place today having been through the challenge and incorporating those years of data into its algorithms. It's back in growth mode, and investors are getting excited again. If it can come through on its claims of helping banks and financial institutions approve more loans, which is one way they make money, it may have an edge over legacy credit evaluation platforms that it says deny access to funds to many people who aren't a credit risk. Upstart released strong earnings results this week. Revenue more than doubled to $257 million in the 2025 second quarter, and transaction volume was up 159%. Operating income was $4.5 million, up from a $55.5 million loss last year, and net income was $5.6 million, from a $54.5 million loss last year. A stock that looks compelling today When Upstart was doing well in the past, its valuation became astronomical. At the current price, Upstart stock trades at a forward one-year P/E ratio of 27, which is reasonable considering its performance and opportunities. Upstart stock fell after the report, probably because loans held on the company's balance sheet are on the rise. That's been a red flag for investors in the past, and the market didn't take this well. Upstart stock may not be the best candidate for the risk-averse investor, but it may be past rock bottom, and it has excellent long-term potential. Trump's Tariffs Could Create $1.5 Trillion AI Gold Rush The Motley Fool's analysts are tracking a massive shift in U.S. tech. Over $1.5 trillion is already flowing into infrastructure, AI, and advanced manufacturing… and the number keeps climbing. Following a major tariff policy shift, a new AI Gold Rush is taking shape, and we think . It builds the tech infrastructure that Apple, OpenAI, and others suddenly can't live without. We just released a full write-up on this under-the-radar stock — and why now might be the exact moment to move. Continue » *Stock Advisor returns as of August 4, 2025 Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy. Why Upstart Stock Soared 26% in July was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Upstart Holdings (UPST) Drops 18.7% After Earnings
We recently published . Upstart Holdings, Inc. (NASDAQ:UPST) is one of the worst-performing stocks on Wednesday. Upstart Holdings fell by 18.74 percent on Wednesday to close at $67.14 apiece as investors appeared to have already priced a strong earnings performance prior to the official release of its second quarter results, meriting a profit-taking. In its updated report, Upstart Holdings, Inc. (NASDAQ:UPST) said it swung to a net income of $5.6 million from a $54.5 million net loss in the same period last year. Revenues more than doubled to $257.29 million from $127.6 million year-on-year. In the first half, Upstart Holdings, Inc. (NASDAQ:UPST) posted a $3.16 million net income, reversing a $119.07 million net loss in the same period last year. Total revenues jumped by 84 percent to $470.66 million from $255 million. Following the results, Upstart Holdings, Inc. (NASDAQ:UPST) raised its full-year revenue guidance to $1.055 billion from $1.01 billion previously, as well as adjusted EBITDA to 20 percent versus 19 percent previously. Copyright: stokkete / 123RF Stock Photo In the third quarter, the company is gunning for a total revenue of $280 million, with revenues from fees expected to be at $275 million, while the rest is expected to come from net interest income. While we acknowledge the potential of UPST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the .
