Investing General Discussion
- Thread starter Furious
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tugofpeace
Pronouns: zie/zhem/zer
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UPST has made a massive move up. $76 currently and my cost basis is $91, with earnings coming up 1st week of August. Used to be a $400 stock, if interest rates do get cut this should continue upwards..
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Rangoth
Vyemm Raider
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I’ve seen that ticker before but never followed them as a company. That’s a massive drop(400 to 70). What caused it and what’s the reason we think it’s fixed. That’s more than even TSLA bombs depending on daily tweet. Had to be fundamental and not just part of the brief market down spike.
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Burns
Avatar of War Slayer
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Civil war and hyperinflation stemming from the military coup in 2021. The military junta government has been accused of genocidal tendencies on their minority Muslim population. I thought they had a bunch of sanctions of them already, so tariffs are a bit surprising.
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tugofpeace
Pronouns: zie/zhem/zer
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They're an AI credit lending company that was issuing loans prior to interest rate hikes. They look at something like 700 data points as opposed to a handful like Fico. Once the rate hikes happened, I imagine their cost of lending and operations rose substantially which eroded their profit margin, hence the plummet from $400 to $13 or so. I've held the entire time and what I've understood is that over the years they've adjusted their business model to be profitable without relying on low interest rates, however now that rate cuts are likely on the horizon, I'd imagine their outlook is bright. In my opinion it seems like a highly algo driven stock with absolutely wild swings compared to the rest of the market, and it's typical for earnings reports to yield a +/- 40% move shortly after. Very high short interest on the stock.
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Rangoth
Vyemm Raider
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Just looked them up. Their operating costs are huge and their margins razor thin. They also don’t do the loans but run the AI bot from what I read that predicts repayability….aka credit worthiness. They claim for consumers you get approved faster with lower rates and for banks less defaults etc.
I can’t find exact details but I’m guessing they make money by splitting the difference in % on the loan somehow or maybe flat fee per loan or interval service charge. It’s a neat concept and use of AI for sure but imagine banks or the government will come up with their own system to maximize their own profits. I’m not sure how much competition they have in their space since they are essentially a risk management service connector, but they need to get their costs under control I think. May happen once AI gets cheaper?
you’re right I think this has some short term potential but they need to expand beyond just doing an AI credit worthiness check to maximum loan amounts and interest rates to survive long term as I think we’ll see shifts in this space as things get more digital. I don’t see 400 again anytime soon. for now you are correct, next earnings is aug 8th and it could get a decent bump. I’ll post if I make a play on it
I think the next major player which could disrupt financial system would some type of centralized loan thing like crypto does. Someone wants to borrow, they do or do not put up collateral and it gives a risk score and amount. People can choose to lend all or part of it(loan only goes through once fully funded) and like 90% of the interest goes to the people making the loans. The service just takes a cut. Almost like buying personal version of corporate bonds. Take super safe loans for 5-8% per year(still more than savings accounts) and in the realm of market personal loan rates. Or imagine a credit card program funded by people. So instead of 12-23%apr or whatever card rates are for average people you can 8-12% card funded by the masses and the masses get 10% return rates
I can’t find exact details but I’m guessing they make money by splitting the difference in % on the loan somehow or maybe flat fee per loan or interval service charge. It’s a neat concept and use of AI for sure but imagine banks or the government will come up with their own system to maximize their own profits. I’m not sure how much competition they have in their space since they are essentially a risk management service connector, but they need to get their costs under control I think. May happen once AI gets cheaper?
you’re right I think this has some short term potential but they need to expand beyond just doing an AI credit worthiness check to maximum loan amounts and interest rates to survive long term as I think we’ll see shifts in this space as things get more digital. I don’t see 400 again anytime soon. for now you are correct, next earnings is aug 8th and it could get a decent bump. I’ll post if I make a play on it
I think the next major player which could disrupt financial system would some type of centralized loan thing like crypto does. Someone wants to borrow, they do or do not put up collateral and it gives a risk score and amount. People can choose to lend all or part of it(loan only goes through once fully funded) and like 90% of the interest goes to the people making the loans. The service just takes a cut. Almost like buying personal version of corporate bonds. Take super safe loans for 5-8% per year(still more than savings accounts) and in the realm of market personal loan rates. Or imagine a credit card program funded by people. So instead of 12-23%apr or whatever card rates are for average people you can 8-12% card funded by the masses and the masses get 10% return rates
That sounds like what LendingClub was. Turns out it was easier just to lend directly. Whatever Happened to Peer-to-Peer Lending?