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Shares of Rocket Companies, the parent of Quicken Loans and Rocket Mortgage, rose as much as 26% Thursday afternoon on its first day of stock market trading.
The stock’s debut, however, was more rocky than rocket: After Rocket Companies priced its initial public offering at $18 a share Wednesday—below the expected range of $20 to $22 a share—the fintech conglomerate’s stock initially sank as low as $17.50 when it began trading late in the morning.
After rising slowly after that, Rocket Companies stock, trading under the ticker symbol “RKT” on the NYSE, surged as high as $22.76 a share in the mid-afternoon, only to quickly give back some of those gains, closing up nearly 20%. The IPO raised $1.8 billion for the Detroit-based company whose subsidiary Quicken Loans is now the largest mortgage lender in the U.S.
In 2015, Quicken Loans launched Rocket Mortgage, an online mortgage application platform that has helped fuel the company’s growth, particularly in direct-to-consumer loans. Even as the economy has suffered during the coronavirus pandemic, Rocket Companies has continued to grow, originating $72.3 billion in loans in the second quarter of 2020, up 40% from the first three months of the year, and more than double the amount during that period in 2019.
In 2019, Rocket Companies made more than $5.1 billion in revenues, a figure the firm expects to at least quadruple in 2020, according to its financial disclosures. Last year, the company had more than $892 million in net income.
In its IPO documents, the company warned that the COVID-19 crisis could dampen that trajectory. “Home sales have slowed, and future growth is uncertain,” the company wrote in its disclosures. “If the COVID-19 pandemic leads to a prolonged economic downturn with sustained high unemployment rates, we anticipate that real estate transactions will continue to decrease. Any such slowdown may materially decrease the number and volume of mortgages we originate.”
The company was founded by Dan Gilbert, a billionaire entrepreneur who remains Rocket Companies’ chairman and is also the majority owner of the Cleveland Cavaliers basketball team.