Rocket Companies Prices IPO At $18 Per Share: Here's Why It Marks A Paradigm Shift In Financial Services

On Wednesday evening, Detroit-based Rocket Companies RKT, home to Quicken Loans, the nation's largest retail mortgage lender, priced its 100-million share IPO offering at $18 per share. This would value the company at about $36 billion.

The stock is expected to make its NYSE debut on Thursday morning. Underwriters include Goldman Sachs, Morgan Stanley and Credit Suisse.

Last month, Rocket Companies said it had planned to raise as much as $3.8 billion by selling 150 million shares at a target offering price range of between $20 and $22. The highly-anticipated debut comes after the IPO market cooled down since the spring.

The IPO's proceeds will be used to finance business purchases and stock from Rocket's existing holding company, Rock Holdings Inc., owned by founder and majority shareholder Dan Gilbert. The company's CEO will continue to be Jay Farner, who’s been with Quicken for over 20 years.

"The cut in the deal price in particular seems a reaction to the poor performance of larger U.S. domiciled companies which have recently gone public," according to Josef Schuster, CEO for IPOX Schuster in Chicago.

Humble Beginnings

In 1985, Quicken Loans started out as Rock Financial, a firm built from the ground up by Gilbert.

In the years since, Quicken’s ownership has traded hands twice. After Rock Financial went public in 1998, it was bought by Intuit Inc INTU where the name was changed to Quicken Loans. In 2002, Gilbert, among other investors, purchased the company back.

Today, after more than a decade of exponential growth in accordance with ISMs, foundational principles put in place by the Rock Family of Companies, Quicken Loans has become a national lending empire, clearing $5.1 billion in total revenue in 2019.

The firm considers itself a technology company that happens to focus mainly on the mortgage industry. Quicken’s over 3,500-plus bankers and technology experts help democratize access to homeownership, allowing serviced communities a clear shot at financial independence and wellness.

Grounds For More

With a core focus on innovation and execution, Quicken is looking to bring increased efficiency and value to the lending space.

According to the firm’s filing with the Securities and Exchange Commission, Quicken is working on a new technology, RocketLogic, which will automate underwriting and streamline loan origination.

“The traditional mortgage application process requires manual interactions and a complex series of data-intensive transactions. These transactions involve carefully filing and cataloging thousands of pages of documents from over a dozen entities, using incompatible systems and disjointed databases,” the filing said.

“RocketLogic leverages data and asks dynamic questions, resulting in clients closing their mortgage faster and with greater accuracy. This will continue to drive efficiency for our team members and bring certainty to our clients.”

Platform For Giving

Though focused on generating revenue to achieve a fair return, Rocket, alongside the Family of Companies, is also concerned with legacy and impact.

The firm has invested heavily in philanthropic initiatives and is credited with rebuilding Detroit’s inner city, empowering the local community with a platform to build.

Adding, the IPO is just a milestone in the company’s aim to revolutionize finance, a natural extension of the firm’s core ISM: numbers and money follow; they do not lead.

“We are a Detroit-based company obsessed with helping our clients achieve the American dream of home ownership and financial freedom. We are committed to providing an industry-leading client experience powered by our award-winning culture and innovative technologies. We believe our widely recognized "Rocket" brand is synonymous with providing simple, fast, and trusted digital solutions for complex personal transactions.” - S-1

To learn more about how Rocket’s culture of excellence will revolutionize financial services, visit www.rocketmortgage.com.