UPST Successful? Consider a couple of points on this:

1. Pagaya $Pagaya Technologies Ltd.(PGY)$ in June, announced a $541M ABS deal vs $174M for Upstart. Investors continue to be interested in Pagaya more than Upstart $Upstart Holdings, Inc.(UPST)$. Pagaya continues to take market share with its lineup of other fintechs funneling all their second-look applications to Pagaya.

2. Credit enhancements Upstart is forced to provide on this deal keeps creeping higher, indicating growing investor skepticism. A-class notes now at 47.2% enhancement. 2023-1 deal was at 43%. 2022 deals were in the 30% range. Is 47% enhancement some kind of new record for the ABS industry?

3. Bankers distancing themselves from Upstart due to reputational fallout from old deals gone bad. Not a good look when no Wall street firm wants to make easy fees by co-sponsoring your deal and selling it to their clients. Upstart had to go solo for the first time on this deal.

"The UPST 2023-2 securitization is sponsored solely by Upstart. The prior UPST securitizations were co-sponsored by Goldman Sachs and are separate from other securitization vehicles containing collateral originated through Upstart including “UPSPT”, sponsored by Jefferies, LLC and “USPTT”, sponsored by an affiliate of Credit Suisse Finance LLC."

Reality here is Upstart caught a nice bid from the AI craze. Good opportunity for traders who saw the AI wave coming. Fundamentals are still in the gutter, and the business model still still has yet to demonstrate long-term viability, in my opinion.

Biggest concern in my view is why Trustpilot review volume and guidance are still so weak with the supposed $6B in commitments in hand. This continues to indicate a bottleneck of high quality buyers, which could persist for years to come. Commitments don't help if there is not viable borrower flow to match with the capital.

CRB blowup risk that you asked about in another post was always a black-swan long-tail type of risk. Looks much less likely now that Upstart has distanced from CRB a bit and the banking sector and crypto headline risk has diminished some. But CRB was never really a high probability concern.