A Golden Entry Opportunity?
On Tuesday, Upstart Holdings, Inc. (NASDAQ: UPST) announced its plan to offer $425 million in Convertible Senior Notes due 2030, subject to market conditions. This private placement, aimed at qualified institutional buyers, includes an option for initial purchasers to buy an additional $75 million in notes within a 13-day period following issuance, bringing the potential total to $500 million. Announced pre-market, the notes will be senior unsecured obligations, with semi-annual interest payments and a maturity date of November 15, 2030, unless converted, repurchased, or redeemed earlier. They may be converted into cash, shares, or a combination, at Upstart’s discretion, with terms like interest rate and conversion rate to be set at pricing.
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Given Monday's closing stock price of $77.46, a hypothetical $70 exercise price would result in around 7.142 million new shares issued, reflecting a 7.92% dilution. At a $77 exercise price, dilution would be closer to 7.2% with around 6.493 million shares. With Upstart’s stock declining 10.39% to $69.43 post-announcement, the selloff may appear excessive. This could be a potential reentry point for investors, given the stock’s considerable upside potential.
$Upstart Holdings, Inc.(UPST)$
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- DouglasMalan·11-13This could be a solid chance for a rebound. Keep an eye on the conversions and market reactionsLikeReport