Why Upstart, SoFi, and Lemonade Shares Initially Plunged, Then Rocketed Higher Today
Shares of Upstart Holdings (NASDAQ: UPST), Sofi Technologies (NASDAQ: SOFI), and Lemonade (NYSE: LMND) plunged at the market opening today, with each stock down more than 5% to start the morning. But by midday, each had recovered, with Upstart rocketing higher to an 8.4% gain, SoFi gaining 1.8%, and Lemonade up 1.7% as of 1:46 p.m. ET.
What caused such a big reversal? It's hard to say, as there wasn't much company-specific news on Tuesday. However, recession fears might be easing, just as a high-profile hedge fund disclosed a new position in both Upstart and SoFi, perhaps boosting sentiment for these beaten-down fintech stocks.
Each of these stocks is economically sensitive, given that they are financial stocks that appeal to millennial and Gen Z consumers. Upstart uses artificial intelligence (AI) to underwrite unsecured personal loans and auto loans; SoFi targets grad students with student loans and then cross-sells its comprehensive suite of banking and financial products over time; Lemonade is an insurer that streamlines the insurance application process by using AI instead of paid agents.
Source Fool.com
