Rocket Companies Inc., the parent of the mortgage giant founded by billionaire Dan Gilbert, is seeking to raise about $2 billion in an initial public offering after initially targeting as much as $3.8 billion, Bloomberg reported, citing people familiar with the matter.
The Detroit-based company that includes Quicken Loans could price its IPO Wednesday. The company expects to market a reduced number of shares at about $18 to $20 apiece, said the people, who declined to be identified because the matter isn’t public. It had initially marketed 150 million shares at $20 to $22 each, with another 22.5 million shares available for the deal's underwriters to purchase.
Terms aren’t finalized and could still change, the people said. The company is expected to begin trading Thursday on the New York Stock Exchange under the symbol RKT.
A representative for Rocket did not respond to requests for comment.
Despite the COVID-19 pandemic sending the country in a recession, record-low mortgage rates have helped to spur refinancings and a bustling housing market. Originations could hit their highest level this year since 2005, according to the Mortgage Bankers Association. Low housing inventories also are keeping prices high. And stimulus checks and enhanced unemployment benefits have helped homeowners continue to pay their mortgages through the spring and early summer.
Despite the activity, the mortgage and related services industry stocks have a collective 7.56% year-to-date loss, according to Zacks Investment Research.
Rocket Companies is the nation's largest mortgage lender. It closed $145 billion in loans in 2019 and recorded $893.4 million in profit on revenue of more than $5.1 billion. Gilbert founded the company in 1985. In 2010, he moved its headquarters from the suburbs to downtown Detroit. The company employs some 20,000 across the country with most based in Detroit.
Under a multi-tiered stock system, Gilbert would maintain a 79% controlling stake in the company. The majority share would give him final say over major decisions such as the election of board directors, proposed mergers, or sale of the company's assets. Gilbert's net worth totals $7.5 billion, according to Forbes.
Rocket Companies is a holding company consisting of personal finance and consumer service brands, including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk and Edison Financial.
bnoble@detroitnews.com
Twitter: @BreanaCNoble
Bloomberg contributed.
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