Today, loanDepot announced that founder and CEO Anthony Hsieh has personally invested a total of $16.2 million to purchase 3.2 million shares of loanDepot class A common stock since November 2021. This total includes nearly $6.2 million to purchase more than 1.6 million shares of loanDepot class A common stock on the open market between February 3, 2022 and February 8, 2022 at an average price of $3.74 per share.
Hsieh's recent purchases exceed the number of shares that he sold during loanDepot’s Initial Public Offering on February 11, 2021.
"As loanDepot's founder and largest shareholder, I believe that loanDepot's current valuation does not fully reflect our strong business potential or our vision for long-term growth, and that's why I continue to invest personal funds in company shares," said Anthony Hsieh. "loanDepot's assets and capabilities are some of the most sophisticated and diverse in the industry today, and our highly experienced management team continues to innovate and transform the industry. Our diversified loan origination channel strategy, top of funnel marketing and customer acquisition capability, nationally recognizable brand, proprietary mello® tech stack, growing in-house servicing platform and suite of ancillary services position us to successfully compete in a challenging market environment.
"We are relentlessly driven to delight our customers and employees and purposefully built with a diverse mix of channels, innovative technology solutions and a sophisticated performance marketing machine," continued Hsieh. "We believe our capital, liquidity, brand awareness and employee talent enable us to continue profitably grow market share and further cement our place at the forefront of this industry."
loanDepot’s last few earning reports have been quite dismal, with earnings plummeting more than 90% year-over-year in the fourth quarter. Net income sank 97% compared to the fourth quarter of 2020 and fell 91% compared to the third quarter of 2021.
In 2021, net income totaled $623 million, down from $2 billion in 2020 as less profitable purchase loans made up a growing proportion of the company’s business. Gain on sales shrunk approximately 21% from the third quarter of 2021, and originations fell 9%.
"Keep in mind that [gain on sales] GOS is going to continue to adjust according to some of the irrational behavior of competition trying to keep its capacity full without layoffs or workforce reduction," Hsieh said. “While labor is an important component in the costs related to gain on sale, the real driver for margin pressure is from marketing and sales.”
The year 2021 was by no means a complete failure for the company as they had their best year ever in terms of loan origination volume, making $137 billion in loans, up 36% from 2020. Those production gains helped loanDepot grow market share from 2.5% in 2020 to 3.4% last year, the earnings report stated. By Hsieh’s own words: as the refinance boom continues to fade and industry profits shrink, loanDepot will continue to focus on growing market share.
