Why Upstart Stock Lost 14% in March
Shares of beleaguered fintech stock Upstart (NASDAQ: UPST) dropped another 14% in April according to data provided by S&P Global Market Intelligence. It fell along with the broader market after an upswing in February, and it's already making its way back, up 3% in April.
Upstart might have been the top standout stock in 2021, gaining more than 850% before collapsing in a heap. It's now lost 96% of its value since those highs.
The company uses artificial intelligence to assess credit risk, and more clients were partnering with it, since it was able to approve more loans without increasing risk to the lender. However, since the economy began to falter and interest rates were raised, revenue has been declining, and the company went from net profits to net losses. This is partially because in this kind of environment, fewer loans are being generated. The ones that are will naturally come with higher risk of default as rates increase, which means Upstart's technology isn't nearly as valuable right now.
Source Fool.com
