Mortgage Companies Want In on the IPO Boom. Investors Aren’t Convinced.

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Rocket kicked off a mortgage-IPO frenzy when it went public last year. It hasn’t worked out the way all the companies were hoping.

When Home Point and loanDepot listed this year, investors were willing to buy fewer shares—and paid less for them—than the lenders had anticipated.

LoanDepot raised $54 million in its listing, just more than the roughly $50 million in compensation CEO Anthony Hsieh brought home in 2020. Earlier this month, the company had targeted raising between $285 million and $315 million.Is the uptick in mortgage rates making you reconsider buying a home or refinancing your loan? Join the conversation below.

The listing price was disappointing for Rocket executives, who consider the firm a technology company and were disappointed when it didn’t price as highly as one, according to a person familiar with the matter. Rocket trades at about 10 times its projected earnings over the next 12 months, according to FactSet. Information-technology firms in the S&P 500 trade at about 26 times projected earnings.

 

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Mortgage portfolios will face the same challenges as the Bond market, as the Post COVID Recovery takes hold. Wall Street has priced all good News including Recovery. Recovery, however, will come at a price: Inflation & Rate reversal.

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