SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Upstart Holdings, Inc. of Class Action Lawsuit and Upcoming Deadline - UPST

NEW YORK, July 5, 2022 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Upstart Holdings, Inc. ("Upstart" or the "Company") UPST and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and docketed under 22-cv-03668, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Upstart securities between March 18, 2021 and May 9, 2022, inclusive (the "Class Period") against Upstart and certain of its officers (collectively "Defendants") seeking to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder.

If you are a shareholder who purchased or otherwise acquired Upstart securities during the Class Period, you have until July 12, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. 

[Click here for information about joining the class action]

Upstart is a financial technology firm that uses artificial intelligence ("AI") and data science to underwrite consumer credit. The Company partners with banks to offer credit to consumers, either through the Upstart website or through banking partner websites embedded with Upstart technology. Upstart claims that its underwriting process allows banking partners to originate credit with higher approval rates, lower loss rates, and a high degree of automation.

The complaint alleges that, throughout the Class Period, Defendants claimed that the lack of loans the Company retained on its balance sheet ensured it only was exposed to limited credit risk. In reality, as investors learned after markets closed on May 9, 2022, the Company's highly touted, AI underwriting model was unable to adequately assess credit risk in changing macroeconomic conditions. As a result, Upstart had been increasingly underwriting progressively less creditworthy loans throughout the Class Period.

Investors learned the truth during the Company's first quarter 2022 earnings call with analysts when Upstart admitted that the loans the Company had been forced to retain on its balance sheet had more than doubled in a single quarter. Specifically, Chief Financial Officer Sanjay Datta ("Datta") reported that the "balance of loans, notes, and residuals at the end of the quarter was . . . up to $604 million from $261 million in Q4."  Datta attributed the increase of loans on the Company's balance sheet to "rising interest rates and rising consumer delinquencies putting downward pressure on conversion."  Datta acknowledged that "historically, [the Company's] balance sheet has been almost exclusively for the purposes of R&D," but in the first quarter of 2022, the Company used the balance "to do . . . sort of a market clearing mechanism."  He further stated that Upstart had "started to selectively use [its] capital as a funding buffer for core personal loans in periods of interest rate fluctuation where the market clearing price is in flux."

Reporting on the Company's results, one analyst dismissed the Company's purported "market clearing" justification and explained that the increase in loans on the Company's balance sheet represented a "divergence" from the Company's "capital-light business model" that indicated the Company had "few alternatives other than to hold more loans due to funding issues." In response to this disclosure, the price of Upstart common stock cratered 56% the following trading day, from a closing price of $77.13 on May 9, 2022, to a closing price of $33.61 on May 10, 2022.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com

CONTACT:

Robert S. Willoughby 
Pomerantz LLP 
rswilloughby@pomlaw.com 
888-476-6529 ext. 7980

View original content to download multimedia:https://www.prnewswire.com/news-releases/shareholder-alert--pomerantz-law-firm-reminds-shareholders-with-losses-on-their-investment-in-upstart-holdings-inc-of-class-action-lawsuit-and-upcoming-deadline--upst-301580973.html

SOURCE Pomerantz LLP

Posted In: Banking/Financial ServicesPress Releases

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.