Upstart Holdings is having an outstanding week. The stock gained 6% on Thursday, May 18, and has gone up over 40% this week, trading at $22.4 on SimpleFX. What may have caused the unexpected rally?
Upstart Holdings agreed to sell up to $4 billion in consumer installment loans to investment company Castlelake LP. By using artificial intelligence to assess potential borrowers, Upstart is trying to dismantle the established credit rating system.
The shares may be at a bargain price. Upstart has decreased 90% since late 2021 as investors fret that a slowing economy will lead to higher defaults. Due to poor market conditions, the company has also had to keep more of its loans on its balance sheet than it had intended.
