United Wholesale Mortgage made its public trading debut Friday, the largest listing ever through a special purpose company.
The shareholders of Gores Holdings IV Inc. this week approved a merger with the company, now UWM Holdings Corp. called, in a deal to make it public at a valuation of nearly $ 16 billion. It marks a record for SPAC deals, which, according to data provider SPACInsider, have become all the rage on Wall Street.
The Michigan-based mortgage company, which trades under the symbol UWMC on the New York Stock Exchange, closed at $ 11.35 on Friday, slightly below Gores Holdings’ closing price of $ 11.54 on Thursday.
Also known as blank check companies, SPACs reverse the conventional public offering model as they raise money before setting up a business. They use the money to make a takeover that turns the target into a limited liability company. Once the blank check company merges with a target company, as Gores Holdings and UWM did on Thursday, that company will be given the SPAC’s spot on a stock exchange, allowing it to sell stock to the public.
UWM partners with independent brokers across the country to purchase and purchase mortgages. It is one of a number of non-bank mortgage companies embracing public markets at a time when the US housing market is booming. Low interest rates drove mortgage production to record levels in 2020. UWM was the third largest mortgage lender in the US in the first three quarters of 2020, according to the Inside Mortgage Finance research group.