Quicken Loans – to become public under the name – Rocket Companies

Quicken Loans,  the nation’s largest mortgage lender is a private company owned by Dan Gilbert. It quickly grew from a start-up to one of Detroit’s largest employers. 

This Detroit-based holding company tied to Quicken Loans has filed the initial registration statement with the U.S. Securities and Exchange Commission to become public under the name Rocket Companies. 

In an initial public offering, at some point, people will be able to buy partial ownership shares of stock in Quicken Loans.

A registration statement on Form S-1 relating to these securities has been filed with the SEC but has not yet become effective. 

The number of shares to be offered and the price range for the proposed offering have not yet been determined. 

Experts have speculated an initial public offering by Quicken could raise tens of billions of dollars. No date was given for the proposed IPO.

Quicken founder Dan Gilbert would retain a controlling stake in Rocket Companies via a multi-tiered stock structure. 

Rocket companies, which is a holding company consists of personal finance and consumer service brands, including Rocket Mortgage Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Core Digital Media, Rock Connections, Lendesk, and Edison Financial.

Quicken Loans CEO Jay Farner, highlighted the company’s digitization of the mortgage lending process with its launch of the online Rocket Mortgage platform. 

A prospectus included in the filing notes that Rocket Mortgage has provided more than $1 trillion in home loans since it launched, and reports the company’s market share has climbed from 1.3% in 2009 to 9.2% in the first quarter of 2020.

Investment banker Sheldon Stone, of Amherst Partners, said a Quicken Loans initial public offering could mean a lot for the city of Detroit. 

“If they add people and infrastructure and add jobs, it could be a beautiful thing for Detroit.”

Since mortgage interest rates are low and the FED intends to keep them that way for a while so Whether new mortgages come in the form of new houses being purchased or refinanced at a mortgage rate under 3%, there is going to be a lot of people refinancing mortgages with that interest rate and the best time to go public.

Erik Gordon, who is on the faculty of the University of Michigan’s Ross Business School says, there are three reasons to go public:

“One is you can raise some capital right now, the second is once you are public it is easier for you to go back to the public market for another round. 

The third thing is being a public company gives people another liquidity path.” There are also costs and risks when the company decides to go public. 

Because every quarter you have to do filings with the SEC and comply with some expensive rules, and It requires companies to reveal financial information they didn’t have to disclose before.

The company filed employing 20,000 people and it has recorded a profit of  $893.4 million on revenue of more than $5.1 billion.