UWM's inventory unstable in early buying and selling after SPAC merger

At the start of trading on Friday, United Wholesale Mortgage's share price was on the same roller coaster ride as shares of the other two recently launched public non-bank mortgage offers.

The opening price of UWM Holdings Corp. was $ 11.95 per share, according to Yahoo Finance, peaking at $ 12.30 shortly thereafter. The special purpose vehicle that was merged with the company, Gores Holdings IV, closed Thursday afternoon at $ 11.54 per share.

Out of the myriad of mortgage lenders who have gone public since last summer and through to 2021, UWM is only the third to actually make the list, kicking Rocket Cos. And Guild Holdings at.

That initial buzz was short-lived, however, as the stock trended lower and UWM Holdings was down $ 0.29 a day to $ 11.25 at 10 a.m.

For the next hour, UWM was both above and below Gores Holdings IV. As of 11 a.m., all other publicly traded non-bank mortgage lenders – which include Ocwen, Mr. Cooper, New Residential, Redwood Trust, and Impac – were due to a wider decline in stock markets lower. That sell-off was driven by investors re-evaluating the government's stimulus package, according to CNBC.

The SPAC valued UWM at around $ 16 billion. By going public using this method and not by going public, UWM did not have to reduce the size or valuation of its shares during the pricing phase.

Rocket initially wanted to sell 150 million shares at a price between $ 20 and $ 22. In the end, it sold $ 100 million for $ 18. Guild wanted to sell 8.5 million shares between $ 17 and $ 19. that ended up being $ 6.5 million at $ 15 each.

Both companies had an up and down on the first day of trading. Rocket ended at $ 21.51 and Guild at IPO.

On January 22nd, Rocket opened at $ 19.82 and Guild opened at $ 16.15.

"We are grateful to The Gores Group for their expertise in the SPAC process, they are the experts on these matters, and we appreciated all of the guidance they gave to get us to our trading day," said UWM President and CEO Mat Ishbia said in a press release.

In connection with the completion of the merger, UWM received gross proceeds of approximately $ 925 million. This will be broken down into approximately $ 425 million in cash from Gores Holdings IV and $ 500 million in proceeds from the previously announced private placement offering.

United Wholesale Mortgage was founded as United Shore Financial by Mat Ishbia's father Jeffrey. After considering a career as a college basketball coach, Mat Ishbia returned to the family business. After the merger with Gores Holdings IV, he has a 94% stake in UWM Holdings.

The company previously announced net income of $ 1.45 billion for the third quarter, compared to $ 539.5 million in the second quarter and $ 198 million in the third quarter of 2019.

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