Detroit Free Press: Matthew Roling on Rocket Companies, UWM stock prices
Metro Detroit's two mortgage company giants — Rocket Companies and United Wholesale Mortgage — have experienced big profits, growing market shares and high industry rankings since going public during the COVID-19 pandemic. Yet their stock prices remain stuck in the toilet. The sagging stocks have led to much shareholder grousing, including on online message boards, and in the case of Rocket, the slump has attracted shareholder lawsuits and could even affect how much future philanthropy its founder and chairman Dan Gilbert can give. Detroit-based Rocket Companies, the nation's No. 1 mortgage originator, which has more than 15,000 employees in downtown Detroit, closed Thursday at $16.90, below its August 2020 initial public offering price of $18. Rocket's stock briefly spiked in March to over $40 per share on speculative trading that many compared to the Reddit-induced GameStop rally from early in the year. It then hovered between $22 and $25 for a couple months before dropping to more or less current levels in early May, after the company issued guidance about shrinking profit margins. "There are very few businesses that are more sensitive to rate increases than UWM and Rocket," said Matthew Roling, executive director of the Office of Business Innovation at Wayne State University's Mike Ilitch School of Business. "You have nowhere to go but up for rates. And more than anything else, that’s what is weighing so heavily on UWM and Rocket."
