Quicken Loans parent sells shares in IPO

Rocket Companies, the parent of U.S. mortgage lender Quicken Loans, said its initial public offering (IPO) was priced at $18 per share on Wednesday, below a target range, and that it sold fewer shares than planned.

Rocket sold 100 million shares to raise $1.8 billion in the IPO, which valued the company at around $36 billion. The company had aimed to sell 150 million shares at a target price range of $20-$22 per share.

The IPO pricing and deal size suggest Rocket struggled to convince investors its mortgage platform business justified a valuation conferred to a technology company rather than a financial services firm.

At $18, it is now the third-largest U.S. IPO of 2020, excluding blank-check companies. Within its original $20-$22 range, Rocket would have been the largest IPO of a U.S. company of the year so far.

The Detroit-based company, founded by billionaire Dan Gilbert in 1985, said earlier this month it expects a profit of more than $3 billion in the second quarter, compared with a loss in the same period of last year.