Rocket Companies, a Detroit-based mortgage lender operating under the Rocket Mortgage and Quicken Loans brands, raised $1.8 billion in an IPO that had been expected to raise upward of $3.3 billion.
Why it matters: This was a stunning flop, or at least so far as any $1.3 billion IPO can be deemed a flop. Not only because it came amidst a broad-based IPO surge, but also because it followed the IPO overperformance from insurance upstart Lemonade.
- Rocket priced 100 million shares at $18, versus plans to sell 150 million shares at $20–$22.
- It will list on the NYSE (RKT), used Goldman Sachs as lead underwriter, and is controlled by chairman Dan Gilbert.
- The company reports $97 million of net income on $1.37 billion in revenue for Q1 2020.
The bottom line: "Rocket struggled to convince investors its mortgage platform business justified a valuation conferred to a technology company rather than a financial services firm." writes Reuters.
