Mortgage Company Rocket Announces Initial Public Offering
It looks as though a major FinTech initial public offering is just around the corner. Rocket Companies (referred to as either “formerly known as Quicken Loans” or “the parent company of Quicken Loans” depending on who you ask) will offer 150 million shares of Class A common stock as part of its IPO. Currently, the price per share is set to be between $20 and $22, which would raise as much as $3.8 billion. The company intends to list on New York Stock Exchange, utilizing the ticker symbol $RKT. At this time, a proposed debut date has not been announced. Instead, Rocket’s announcement kicked off the “roadshow” part of the IPO.
Under the Rocket Companies banner are a series of offerings, including Rocket Homes, Rocket Auto, and Rocket Mortgage, which happens to be the nation’s largest mortgage lender. According the The Street, the company had $2.3 billion in cash and $17.7 billion in total liabilities at the end of last quarter.
The planned initial public offering is the second recently announced by a FinTech company. Earlier this month, bank operating system provider nCino revealed its plans for an IPO. Although the company initially targeted a $22 to $24 per share price, it eventually hit the market at $31 before popping as high as $77.20 on its debut session. Currently, $NCNO has a market cap of more than $7 billion as opposed to the $2 billion valuation it had before going public.
While one FinTech has found success on the stock market so far this month, there’s clearly much more at stake for Rocket. For one, while nCino ended up selling more than eight million shares, that’s dwarfed by the 150 million Rocket Companies is planning on. Additionally, there are currently a lot of questions surrounding the mortgage market given the economic impacts of the coronavirus pandemic and the current ultra-low interest rates. That said, these low rates have also increased demand for new loans as well as refinancing.
It should also be noted that, while perhaps not a FinTech in the truest sense, Rocket has often been lumped into the group given their focus on technology and online lending. Moreover, as LendIt points out, the company does not hold loans on their balance sheet. Thus, it seems fair enough to count this as a FinTech IPO — and one that could be one of the largest of the year. With final pricing info expected in the week ahead, we’ll soon see if $RKT takes off like its namesake or fails to launch.