DETROIT – Detroit-based Quicken Loans launched its IPO on the New York Stock Exchange on Thursday with a lower-than-expected opening price of $18.
Rocket Cos., the parent company of Quicken Loans, will offer public shares for the first time this week, but it will be smaller than originally planned. The company originally planned to sell 150 million shares for between $20 and $22, according to the Wall Street Journal.
The company announced in June that it had filed a registration statement on Form S-1 with the United States Securities and Exchange Commission regarding the proposed initial public offering of its Class A common stock.
Rocket Companies consists of personal finance and consumer services brands, including Rocket Mortgage.
The application has been made for the listing of the common stock on the New York Stock Exchange under the symbol “RKT”.
What does this mean for Detroit?
Quicken Loans quickly grew from a start-up to one of Detroit’s largest employers. What does his plan to go public mean for the city of Detroit?
Currently, Quicken Loans – the nation’s largest mortgage lender – is privately owned by Dan Gilbert.
It looks like that’s about to change, as in an initial public offering, people will at some point be able to buy partial ownership – shares of Quicken Loans. That’s where the billions of dollars in the deal will come from.
Gilbert is already worth around $7 billion, but his wealth could increase further with the decision to take Quicken Loans public.
When a company of this size sells stock, it attracts billions of dollars that can be distributed in many ways.
Investment banker Sheldon Stone of Amherst Partners said an initial public offering from Quicken Loans could mean a lot for the city of Detroit.
“If they add people and infrastructure and create jobs, that could be a great thing for Detroit,” Stone said.
He thinks Gilbert picked a particularly good time to pull it all together. Mortgage interest rates are low and the FED intends to keep them that way for some time, he said. This arms Gilbert with liquidity to better compete with the banks.
“Whether new mortgages come in the form of new homes being purchased or refinanced at a mortgage rate below 3%, there will be a lot of people refinancing mortgages with that interest rate,” Stone said.
Gilbert recently said that everything he does comes through the lens of what’s best for Detroit. Stone thinks Gilbert knows exactly how he’s going to use this new money.
“I think it’s consistent with his mission to build on what he’s already started,” Stone said.
Copyright 2020 by WDIV ClickOnDetroit – All Rights Reserved.