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Quicken Loans IPO Trading Starts Low

Rocket Companies, Inc., the parent of U.S. mortgage lender Quicken Loans, said in a statement its initial public offering (IPO) was priced at $18 per share Wednesday.

The pricing wound up below the initial target range, and it sold fewer shares than planned, Reuters reported Wednesday.

The real estate, mortgage, and financial services company sold 100 million shares its first day, raising $1.8 billion and bringing the company value to about $36 billion.

Rocket Companies reportedly had aimed to sell 150 million at a target price range between $20-$22 per share.

At $18 a share, the company is the third-largest United States IPO of 2020, except for blank-check companies.

Had it reached that $20-$22 range, Rocket would have been the largest IPO of an American company of the year so far.

Reuters’ Joshua Franklin reports that “the IPO pricing and deal size suggests Rocket struggled to convince investors its mortgage platform business justified a valuation conferred to a technology company rather than a financial services firm.”

By Thursday afternoon, shares of Rocket Companies rose as much as 22% to $21.87 per share.

The Detroit-based Rocket Companies, founded by Dan Gilbert in 1985, said in a statement that it expects a profit of $3.3 billion in the second quarter, compared with a loss in the same period of last year.

“Rocket has spent the last 35 years becoming America’s largest mortgage lender by taking the road less traveled,” Dan Gilbert said in a statement before the stock-exchange debut.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others.
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