I very much appreciated your Deep Dive. It was very timely, with the uptick in defaults raising questions at this time. I went into earning with a greater allocation because, at least in part, due to your analysis.
This is a "deep" dive? The "profitability" is a complete ruse. Look at SBC. Every share they "buy back" they are not retiring, but handing out the back door as compensation. Their "profits" aren't inuring to shareholder benefit, they're 100% being looted. When you use the SBC game, it creates the illusion that your operating margin is something other than what it actually is, and you're profitable when you're not. The SBC flywheel is all well and good until the ponzi scheme falls apart, and the people you're paying via SBC lose confidence and start to demand actual payroll. Dig deeper, you'll find lots more. These guys are masters at the accounting game. When markets are euphoric like this, nobody gives a darn about GAAP, they just shrug at "Adj." EPS, and swallow. But there will come a time when people look back and wonder how people got conned into believing things were worth something they weren't, and it will start with an inability to read and understand the basics of financial statements and the willingness to buy the "Adj. EPS" con. Look closely at how they try to disguise SBC in their 10Q. There's a whole lot more there. In fact, their entire business model is misrepresented. It's really a securitization business. Most of the “revenue” is passing through ad expense. Their claim that “banks are paying to use our AI platform but we have to source and sell all the loans," puts the lie to it.
Hey. Great review thanks.
Can you please explain what is the contribution margin please? 🙃
Hi Brad,
I very much appreciated your Deep Dive. It was very timely, with the uptick in defaults raising questions at this time. I went into earning with a greater allocation because, at least in part, due to your analysis.
As you’ve said here, this was a great quarter.
Long Upstart now 12.2% of portfolio
Thanks,
Jason
Because of your "Deep Dive" I had UPST since Feb on my watchlist. Thank you.
How are they going to fund their $400 million stock buyback?
Thanks for a great summary!
Thanks for the update. It's difficult to see the flaws in a great quarter for the name.
This is a "deep" dive? The "profitability" is a complete ruse. Look at SBC. Every share they "buy back" they are not retiring, but handing out the back door as compensation. Their "profits" aren't inuring to shareholder benefit, they're 100% being looted. When you use the SBC game, it creates the illusion that your operating margin is something other than what it actually is, and you're profitable when you're not. The SBC flywheel is all well and good until the ponzi scheme falls apart, and the people you're paying via SBC lose confidence and start to demand actual payroll. Dig deeper, you'll find lots more. These guys are masters at the accounting game. When markets are euphoric like this, nobody gives a darn about GAAP, they just shrug at "Adj." EPS, and swallow. But there will come a time when people look back and wonder how people got conned into believing things were worth something they weren't, and it will start with an inability to read and understand the basics of financial statements and the willingness to buy the "Adj. EPS" con. Look closely at how they try to disguise SBC in their 10Q. There's a whole lot more there. In fact, their entire business model is misrepresented. It's really a securitization business. Most of the “revenue” is passing through ad expense. Their claim that “banks are paying to use our AI platform but we have to source and sell all the loans," puts the lie to it.