SAN FRANCISCO--(BUSINESS WIRE)--The law firm of Lieff Cabraser Heimann & Bernstein, LLP announces that class action litigation has been filed on behalf of investors who purchased or otherwise acquired the securities of Upstart Holdings, Inc. (“Upstart” or the “Company”) (Nasdaq: UPST) from March 18, 2021 through May 9, 2022, inclusive (the “Class Period”).
If you purchased or otherwise acquired Upstart securities during the Class Period, you may move the Court for appointment as lead plaintiff by no later than July 12, 2022. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the actions will not be affected by your decision of whether to seek appointment as lead plaintiff. You may retain Lieff Cabraser, or other attorneys, as your counsel in the action.
Upstart investors who wish to learn more about the litigation and how to seek appointment as lead plaintiff should click here, text or email firstname.lastname@example.org, or call Sharon M. Lee of Lieff Cabraser at 1-800-541-7358.
Background on the Upstart Securities Class Litigation
Upstart, headquartered in San Mateo, California, is a financial technology firm that operates a cloud-based artificial intelligence (“AI”) lending platform. Upstart claims that its underwriting process allows banking partners to originate credit with higher approval rates, lower loss rates, and a high degree of automation.
The action alleges that defendants made material misrepresentations and failed to disclose to investors: (1) that Upstart’s AI model was not able to adequately account for macroeconomic factors, including rising interest rates which impact loans’ market-clearing price; (2) that the Company’s conversion rate was being negatively impacted by macroeconomic factors; and (3) that Upstart was likely to resort to using its balance sheet to fund loans which exposed it to increased credit risk.
On May 9, 2022, after market close, the Company announced its financial results for the first quarter 2022 and reported that the loans on its balance sheet had more than doubled in just one quarter, from $252,477,000 for the period ending December 31, 2021, to $597,981,000 for the period ended March 31, 2022. In addition, Upstart reduced its guidance for fiscal year 2022, with expected revenue lowered from $1.4 billion to $1.25 billion. On the same day, during an earnings conference call with investors and analysts, Upstart’s Chief Financial Officer, defendant Sanjay Datta, stated that the substantial increase in loans held on the Company’s balance sheet was the result of “loan default rates” from loans from the “two or three vintages” of loans since the expiration of government stimulus. On this news, the price of Upstart stock fell $43.52, or 56.42%, from its closing price of $77.13, to close at $33.61 per share on May 10, 2022, on extremely heavy trading volume.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP, with offices in San Francisco, New York, Nashville, and Munich, is an internationally-recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. The National Law Journal has recognized Lieff Cabraser as one of the nation’s top plaintiffs’ law firms for fourteen years. Law360 has selected Lieff Cabraser as one of the Top 50 law firms nationwide for litigation, highlighting our firm’s “laser focus” and noting that our firm routinely finds itself “facing off against some of the largest and strongest defense law firms in the world.” Benchmark Litigation has named Lieff Cabraser one of the “Top 10 Plaintiffs’ Firms in America.”
For more information about Lieff Cabraser and the firm’s representation of investors, please visit https://www.lieffcabraser.com/.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.