DETROIT – Detroit-based Quicken Loans debuted their IPO on the New York Stock Exchange on Thursday with a lower-than-expected opening share price of $18.
Rocket Cos., the parent company of Quicken Loans, will offer public shares for the first time this week, but it will be smaller than originally reported. The company originally planned to sell 150 million shares at between $20 and $22, according to the Wall Street Journal.
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The company announced in June it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to the proposed initial public offering of its Class A common stock.
Rocket Companies consists of personal finance and consumer service brands, including Rocket Mortgage.
The application has been made for listing the common stock on the New York Stock Exchange under the ticker symbol “RKT.”
What does this mean for Detroit?
Quicken Loans quickly grew from a start-up to one of Detroit’s largest employers. What does its plan to go public mean for the city of Detroit?
Right now, Quicken Loans -- the nation’s largest mortgage lender -- is a private company owned by Dan Gilbert.
It appears that’s about to change because in an initial public offering, at some point people will be able to buy partial ownership -- shares of stock in Quicken Loans. That’s where the billions of dollars will come from in the deal.
Gilbert is already worth roughly $7 billion, but his wealth could expand more with the move to make Quicken Loans public.
When a company of this size sells stock, it attracts billions of dollars that can be spread around in many ways.
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,” Stone said.
He believes Gilbert chose an especially good time to pull this together. Mortgage interest rates are low and the FED intends to keep them that way for a while, he said. That arms Gilbert with cash to better compete with banks.
“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,” Stone said.
Gilbert recently said everything he does is through the prism of what’s best for Detroit. Stone believes Gilbert knows exactly how he’s going to use this new money.
“I do think that this is consistent with his mission of building on what he has already started,” Stone said.