The initial public offering by the nation’s top mortgage lender turned out to be smaller and less lucrative than anticipated, a sign of investors’ sensitivity to dark economic forecasts despite resilient housing and IPO markets.
Rocket Cos., the parent of Quicken Loans, priced shares below expectations late Wednesday, with an offering of 100 million shares at $18 apiece, as first reported by The Wall Street Journal. The company had previously planned to sell 150 million shares at between $20 and $22 apiece.
The stock is expected to start trading Thursday on the New York Stock Exchange.
At the new price and number of shares sold, the IPO would raise about $1.8 billion. The debut had previously been expected to raise as much as $3.3 billion, which would have been the year’s second-largest IPO behind only the $4 billion that hedge-fund billionaire William Ackman raised with his special-purpose acquisition company last month, according to Dealogic.
The mortgage market has held up surprisingly well as the coronavirus pandemic has battered the U.S. economy. The Mortgage Bankers Association expects mortgage originations to hit their highest level this year since 2005. Record-low interest rates are spurring refinancings, while a tight housing supply has kept home prices high, with young families moving to the suburbs and wealthy city dwellers looking for second homes.
An expanded version of this report appears on WSJ.com.
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Originally published on MarketWatch