Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Benzinga
Benzinga
Business
Aaron Bry

Is Upwork A Good Investment Considering These Changes?

If you’ve been to a grocery store recently, you know inflation is here. But it’s not just consumers struggling to cope with rising costs, so are companies that are trying not to price out customers. 

Netflix Inc (NASDAQ:NFLX) raised subscription costs, Chipotle Mexican Grill, Inc. (NYSE: CMG) upped the price of burritos and even Robinhood Markets Inc. (NASDAQ:HOOD) increased the interest rate of its margin loans.

Upwork Inc (NASDAQ:UPWK), an online work marketplace, announced it will be instituting new fees and a plan. 

What Happened: Upwork announced on its website that the company is offering a new plan that consolidates Upwork Basic and Upwork Plus. Now called Client Marketplace Plan, instead of paying a subscription fee plus a processing fee, Upwork will charge clients 5% per transaction (3% if using a checking account). Upwork’s ACH charges used to have a 0% fee, but they will now have a 3% fee. Credit card charges used to carry a 3% fee, and will now be 5%. 

Why It Matters: Many companies rely on Upwork and other peers, such as Fiverr International Ltd (NYSE:FVRR), for hiring contractors and temporary workers. While some companies may cancel their contracts with Upwork, most will not be in a position to do so. This will help Upwork bring in more revenue, which is good news for investors. 

Upwork’s stock could be hurt if the economy takes a downturn and hiring slows. But for now, if hiring trends continue to be positive, Upwork’s stock could have some nice upside, especially considering the new fees the company will collect. 

4.4.2022 Correction: "Original story incorrectly stated that Upwork was moving to a two-tier subscription-based model for clients. In reality, Upwork is moving away from its Upwork Plus model and working toward moving all clients to the Marketplace Plan"

 

 

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.