Upstart Now Has $1 Billion Worth of Loans on Its Balance Sheet. Should Investors Be Worried?
The artificial intelligence-assisted lending technology company Upstart (NASDAQ: UPST) recently reported its fourth-quarter results, and while the figures beat analysts' consensus estimates, they were anything but reassuring.
One fact in particular that caught my eye is that the company now has roughly $1 billion of loans on its balance sheet. Holding debt in this way was never part of the plan under Upstart's business model, but as capital markets have dried up, it has found itself in this new position. Should investors be worried?
While it is common for banks to hold some of the loans they make on their balance sheets, Upstart is not a bank, and management has made it very clear they have no intention of pursuing a bank charter. Rather, Upstart views itself as more of a high-growth software-as-a-service (SaaS) business and a loan marketplace.
Source Fool.com
