Bullish indicating open at $55-$60, IPO prices at $37
SAN MATEO, Calif. - Upstart Holdings, Inc. (NASDAQ:UPST), a fintech company currently valued at $6.62 billion, announced Monday its intention to offer $500 million in Convertible Senior Notes due 2032 to qualified institutional buyers in a private offering under Rule 144A of the Securities Act. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 15.74, indicating robust ability to meet short-term obligations.
The company also plans to grant initial purchasers an option to buy up to an additional $75 million in notes within a 13-day period after issuance. The notes will be senior, unsecured obligations with semi-annual interest payments and will mature on February 15, 2032, unless converted, repurchased, or redeemed earlier. This offering comes as Upstart’s stock trades at $68.76, with InvestingPro analysis indicating the stock is currently overvalued based on its Fair Value assessment.
Upstart intends to use part of the proceeds to fund capped call transactions, which are designed to reduce potential dilution to common stock upon conversion of the notes. Another portion may be used to repurchase some of its outstanding 0.25% Convertible Senior Notes due 2026, with the remainder allocated for general corporate purposes.
In connection with the offering, Upstart expects to enter into privately negotiated capped call transactions with initial purchasers or their affiliates. These transactions would cover the number of common shares underlying the notes sold in the offering, subject to anti-dilution adjustments.
The company noted that option counterparties may purchase shares of Upstart’s common stock or enter into derivative transactions around the time of pricing, which could affect the market price of both the stock and the notes.
The notes will be convertible into cash, shares of Upstart’s common stock, or a combination at the company’s election. Specific terms including interest rate and initial conversion rate will be determined at pricing.
According to the press release statement, the securities will only be offered to qualified institutional buyers and have not been registered under the Securities Act, limiting their sale to applicable exemptions from registration requirements. Despite the company’s impressive revenue growth of 53.62% over the last twelve months, InvestingPro subscribers have access to 12 additional key insights about Upstart’s financial health and market position through exclusive ProTips and the comprehensive Pro Research Report, available for over 1,400 US stocks.
In other recent news, Upstart Holdings Inc. reported impressive second-quarter results for 2025, surpassing Wall Street expectations for both earnings and revenue. The company achieved earnings per share of $0.36, which was 50% higher than the anticipated $0.24. Revenue reached $257 million, exceeding forecasts by 14%. This quarter marked Upstart’s first profitable period since 2022, highlighting a significant turnaround. Following these results, Needham raised its price target for Upstart to $82 from $70, maintaining a Buy rating. The firm cited the company’s achievement of GAAP profitability as an important milestone. These developments reflect a positive outlook for Upstart, as indicated by the raised price target and the company’s financial performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.