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Stocks A to Z / Stocks U / Upstart Holdings (UPST)
No. of Recommendations: 2
I shoulda been a manager.
Upstart's top managers are set to lay a giant stinky egg in Q1.
They expect revenue to be down 65% year-over-year and down 29%
sequentially from Q4. They're guiding for a GAAP loss of $145M.
They plan to use $15M in cash to get rid of 20% of their staff.
Woes "R" Us.
For that anticipated performance, they've just awarded themselves
1.8M shares in the form of restricted stock units (RSU) and
options. I estimate the value at around $27M.
Earlier this month, I estimated that their stock based compensation
would rise by about $41M in Q1. This was an astounding increase.
I was struggling to see where it could come from. The 27M awarded
is about 2/3 of that $41M, so that answers that.
Incidentally, it's also about 1/3 of the stock they repurchased in
2002.
I suppose they need some additional incentive to show up for work
every day. After all, they're only getting paid about half a million
dollars each in salary.
Ears <long Upstart>
No. of Recommendations: 2
Earlier this month, I estimated that their stock based compensation
would rise by about $41M in Q1. This was an astounding increase.
I was struggling to see where it could come from. The 27M awarded
is about 2/3 of that $41M, so that answers that.
Incidentally, it's also about 1/3 of the stock they repurchased in
2022.
Yuck. This kind of stuff does not make me a happy shareholder. :(
I can deal with a cyclical downturn in business, but the top managers getting immense riches at the same time the company is struggling to rein in expenses to scratch back toward break-even? Gross.
No. of Recommendations: 1
Yuck.
Well put!
They are squeezing this in at the end of the quarter. Gets to our previous discussion
about stuffing all the bad news into an already ugly quarter.
On a more positive note, they announced release of their UMI today along with a web
page that explains it. Very slick. We'll have to see in the coming months if there's
any steak behind this particular sizzle.
Ears
