Why Upstart Was Down Double Digits Today
Shares of fintech platform Upstart Holdings (NASDAQ: UPST) were down big today, falling about 11.4% as of 2:30 p.m. ET.
There wasn't any material news out of the company today, but macroeconomic fears over a recession have begun to take hold of the market. That's not good for any stock, particularly a lender. What's an even worse stock to own than a traditional lender on such a day? A new fintech that investors may have come to doubt, due to its short history as a public company.
Upstart investors might say, "Hey! Upstart isn't a lender!" Technically, that's true. However, even though Upstart positions itself as a tech-savvy underwriting platform that sells its loans to third-party banks and investors, it is not immune from the dynamics of lending. Last quarter, due to the rapid rise in interest rates, Upstart's third-party lending customers, which buy its loans, pulled back as they recalibrated their risk and return models. That caused Upstart to retain a small portion of its loans on its balance sheet.
Source Fool.com
