Rocket’s debut IPO & market share goal
Detroit-based Rocket Companies, Inc. has a lot to celebrate and plan forward. Yesterday, the top two executives of America’s largest mortgage lender rang the New York Stock Exchange (NYSE) opening bell to mark Rocket’s debut as a publicly traded company under the ticker symbol RKT.
Rocket’s widely publicized initial public offering (IPO) consisted of 100 million shares set at $18 per share (traded at $17.5 low and $22.76 high). The company’s IPO value of $1.8 billion reportedly is the third largest U.S. IPO of the year.
Why would a very successful private company go public after 35 years?
Dan Gilbert, founder and Chairman of the Board of Rocket Companies and CEO Jay Farner, gave a few hints during a CNBC interview.
Farner said the IPO positions the company for growth in the next five to 10 years. More specifically, he said, Rocket aims to increase market share from the current nearly 9%, up to around 25% in the course of the next 10 years.
Another reason for the IPO is to strengthen the company culture by turning Rocket employees into stockowners, said Gilbert. To his credit, Rocket Ventures is an earlier example of his personal efforts to help bring prosperity to 20,000 team members across the U.S. and the cities where they work and live.
“We want to use our stock as currency,” and eventually acquire more fintech organizations and put them in the vault, said Gilbert. “We’re excited about it.”
Since 1985, when Gilbert founded the tech-driven company, it has provided real estate, mortgage and financial services through multiple businesses including Rocket Homes, Rocket Auto and its flagship businesses Quicken Loans, Rocket Mortgage.
“Rocket has spent the last 35 years becoming America’s largest mortgage lender by taking the road less traveled,” said Gilbert in a company statement. “I have full confidence in Jay and the rest of the senior leaders to build on the blueprint that got the company to where it is today and find innovative ways to reach new clients in the future.”
The “Rocket” brand is widely recognized for providing simple, fast, and trusted digital solutions. Rocket Mortgage, the largest retail mortgage originator in the U.S, offers an end-to-end digital experience for residential mortgage borrowers using a one-stop shop platform.
“We invest for the long-term and place enormous value on supporting our team members, clients and hometown,” explained Farner. “Rocket Companies has a proven record of innovation that drives industry disruption and delivers an unmatched customer experience, and we’re excited to continue that legacy now as a public company. I’m proud of the company we’ve built, both in our financial results and in our resolve to be a force for good.”
Since moving headquarters to Detroit in 2010, Rocket has used expertise and resources to improve access to housing, employment, and education, including hundreds of thousands of hours volunteered by team members.
Rocket sees “tremendous runway, to drive long-term profitable growth by increasing market share in the massive and fragmented mortgage industry and leveraging our technology platform to unlock opportunities in our ecosystem,” said Farner.
Highlands brings Adwerx automation to LOs
Highlands Residential Mortgage, Ltd., an independent mortgage banker headquartered in Dallas, Texas is embracing digital marketing automation technology to help loan officers build and scale their own brand through the Adwerx Enterprise Automation Platform.
Founded in 2010, Highlands has seen “tremendous growth for seven consecutive years,” according to the company website, expanding its presence nationally. Milestones the company attributes to “creating a culture that supports their team members,” many of whom are seasoned loan officers located in different branch locations in sixteen states.
In partnership with Adwerx – which specializes in personalized, omnichannel brand marketing and automation at enterprise scale, including ads streamed on TV, popular websites, Facebook, Instagram and mobile apps – the bank will offer loan officers a customized digital advertising campaign via the Adwerx Platform.
Each loan officer now has digital retargeting campaigns provided by Highlands, that launch automatically across social media platforms and websites visited by potential clients. The platform ensures the loan officers “are continuously in front of site visitors who have shown interest in their business” creating the opportunity to recapture the interest of prospects.
In addition, the bank said, loan officers have access to “a pre-made inventory of personalized digital and streaming TV ads” delivered on a branded, self-service portal they can run individually, as a way to complement their automated campaigns.
“We pride ourselves on being at the forefront of the latest technology, and it is essential that our loan officers use digital advertising to stay in front of their prospects, especially in today’s competitive market,” said Josh Herbert, EVP, Chief Information Officer at Highlands. “The Adwerx Platform delivers comprehensive digital advertising strategies that are easy to create and deploy, and frees up valuable time to better serve our clients.”
Realtor: Buying peak shifts from May to August
Not much was normal in May, traditionally the peak home buying month. Because of COVID-19, this year August may become the May equivalent of home buying, according to Realtor.com, as buyers and sellers rebound from the spring disruption.
The Weekly Recovery Report shows growth “in pace of sales, demand and prices” have surpassed last year levels, while inventory continues to shrink.
For the week ending Aug. 1, the Housing Market Recovery Index reached 103.8 nationwide, up 0.1 points over last week and 3.8 points above the pre-COVID baseline. (The overall index is set to 100, using January 2020 data as baseline, the higher a market’s index, the higher its recovery and vice versa.)
Regionally, the West is leading the recovery with an overall Index of 110.5, which is visibly above the pre-COVID-19 benchmark, the report notes. Followed by 108.2 in the Northeast, remaining “above recovery pace and continues to improve.”
Locally, 29 markets saw the overall recovery index cross the recovery benchmark – with New York, Las Vegas, Seattle, Boston and Philadelphia showing greatest recovery.
“Real estate activity in the U.S. has regained its strength and continues on an upward trajectory as we enter the middle of the summer,” said Javier Vivas, director of economic research, depending on lockdown dynamics in the fall. “The housing market will need to remain above pre-COVID levels for at least another 10 weeks to make up for the lost activity in the second quarter of the year.”
The negative demand-supply ratio helped push median listing prices up by 9.4% over last year. Home prices “are now growing at the highest pace since January 2018,” according to the report, which is based on searches on realtor.com.
The inventory of homes for sale was down 35%, while buyer interest remains high setting the stage for further price gains that in turn “could eventually cause buyer demand to cool.” New listings also were down, by 11% as selling a home “may involve some extra precautions,” the report notes, due to COVID-19 hinging sellers to avoid listings. As a result, time on market is now 4 days faster than last year.