Quicken Loans Seeks Nearly $3.8B From IPO
Quicken Loans seeks to raise as much as $3.8 billion from its initial public offering, according to the Detroit Free Press. The report reveals the company is proposing a $22-per-share maximum offering, with plans to sell up to172,500,000 shares. The public will be able to purchase 150 million shares.
With this offering, Dan Gilbert, founder and chairman of Quicken Loans, maintains control of the company through his holding company, Rock Holdings. Gilbert and other board members will still have approximately 80% control, according to the SEC filing. The article says Quicken believes it is likely to net $3.1 billion at an offering price of $21 per share. At those numbers, this would be 2020's largest IPO. The filing expects Rocket Companies to have a valuation of about $40 billion.
"Unlike most IPOs, the company is profitable, and has earned high return on equity,” Jay R. Ritter, an IPO expert and Cordell Eminent Scholar at the University of Florida’s Warrington College of Business, told the newspaper. "As with other mortgage lenders, when interest rates drop, many homeowners refinance, and thus the number of new mortgages (including refinancing) tends to fluctuate a lot from year-to-year," said Ritter.
Kat Liu, an analyst at Chicago-based IPOX Schuster LLC, told the Free Press the pricing date for the IPO should be next Tuesday, Aug. 4, with the sale commencing on Wednesday, Aug. 5.
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