SAN MATEO, CA – Upstart Holdings, Inc. (NASDAQ:UPST), a fintech company providing artificial intelligence lending platforms, has announced the initiation of an at-the-market (ATM) equity offering program, as per their latest 8-K filing with the Securities and Exchange Commission (SEC).
The announcement comes as the company's stock has shown remarkable momentum, with a 218% return over the past year and a recent surge of 22% in the past week, according to InvestingPro data.
The company, headquartered in San Mateo, California, entered into a Sales Agreement with BTIG, LLC on Thursday, allowing for the potential sale of common stock worth up to $500 million. With a current market capitalization of $7.87 billion and a strong current ratio of 13.32, Upstart maintains a solid financial position with liquid assets well exceeding short-term obligations.
The shares, each with a par value of $0.0001, will be offered pursuant to an effective shelf registration statement and the related prospectus filed with the SEC on the same day. Upstart's management has expressed intentions to use any net proceeds from the sale for general corporate purposes, including working capital.
Under the Sales Agreement, BTIG, LLC will act as the sales agent, tasked with selling the shares on Upstart's behalf based on the company's directives. The sales agent is entitled to a commission of up to 2% of the gross proceeds from the sales executed under the agreement. The transactions may be carried out at market prices, aligning with the definition set forth in Rule 415(a)(4) of the Securities Act of 1933, as amended.
Upstart has clarified that there is no obligation to sell any shares and retains the right to suspend sales at any time. The Sales Agreement is set to terminate upon the sale of all shares or upon notice by either party, subject to certain conditions outlined in the agreement.
The filing includes the legal opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, regarding the legality of the common stock being offered, which is also filed as an exhibit to the 8-K report.
This SEC filing and the associated Sales Agreement mark a significant step for Upstart as it seeks to raise capital while offering flexibility in its financing strategy. While the company reported losses in the last twelve months, InvestingPro analysis indicates that analysts expect profitability this year, with 8 analysts recently revising their earnings estimates upward.
For deeper insights into Upstart's financial health and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, available for over 1,400 US stocks.
Given the stock's high volatility and current trading levels, which InvestingPro analysis suggests may be above Fair Value, investors should carefully monitor the company's execution of this offering program.
In other recent news, Upstart Holdings Inc . has been making headlines with significant developments.
The company has seen a notable surge in its Q4 revenue, reporting $219 million, a 56% increase YoY, and surpassing analyst expectations. The adjusted EPS came in at $0.26, and the company anticipates Q1 2025 revenue of approximately $200 million, above analyst estimates. Furthermore, Upstart's full-year 2025 revenue projection of about $1 billion also exceeds analyst expectations.
Citi analyst Peter Christiansen raised the price target on Upstart shares to $108, up from the previous $87, while reiterating a Buy rating. Christiansen also highlighted Upstart's proactive approach in issuing discretionary capital ahead of potential new capital deals and the success of its artificial intelligence in risk separation. On the other hand, Mizuho (NYSE:MFG) Securities has increased the price target for Upstart shares to $110, up from the previous $90, citing the company's improved financial outlook and potential for continued outperformance.
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