“Banks cannot really go down in ticket size to make it economical because the contribution margin they would get with such a loan doesn’t cover the associated costs,” he said.
“At the same time, fintech companies have proven that a more data-driven approach and a more automated approach to credit can actually make it work and expand the addressable market.”
“Upstart said yesterday that it expects to generate only about $228 million of revenue in the second quarter of the year, which is significantly lower than the $295 million to $305 million it had initially guided for. Furthermore, Upstart expects to lose between $27 million and $31 million in the quarter, also a much wider loss than anticipated.”
That’s a HUGE revenue miss. I’m amazed it’s not down 50%.
Own stocks in three FinTech, SQ MQ UPST. Thought of selling the other twos and put all in SQ, looking through the daily price charts, surprise to find that MQ is looking best. So no action. Anyhoo, aggregate investment in FinTech is less than SHOP investment, so is not a huge investment in FinTech.
Just for info, AAPL is into FinTech FinTech is one of the potential candidate that could replace iPhone as the main revenue driver. The other three is well-being, metaverse and AV.
This seems to be a terrible idea. Borrow money to have enough cash to get 401k match. Then if you change employers you have to repay the money and 20% of the gain in value. The issue is paying it back requires cashing out at least a portion of the 401k which is taxed (all of it not just the gains) and 10% penalty. Since let’s face it, if someone had cash to repay the money, then they wouldn’t be using the program in the first place. This could make a layoff even worse, since it’d trigger repayment.
I was surprised to see their revenue growth rate increase. It grew almost 2x more than the gross-merchandise volume, so they are getting more revenue per $ of item sold.
Affirm — The stock plunged 18% after Affirm disappointed on earnings per share expectations, and issued weaker-than-expected guidance for its fiscal second quarter.
Upstart Holdings — The AI-driven lending platform tumbled 11% after the company issued a weaker-than-expected revenue forecast for the current quarter, citing challenging economic conditions.
“Over the past 10 years, we, along with most tech companies, became too focused on growing headcount as a metric for success.”
This sums up the insane private valuations very well. The ability to hire was the measure of success. That success meant needing to raise more money. For the math to work, the next valuation had to be even higher. It became a house of cards.