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Rocket’s stock trading was halted several times on Tuesday.
Emily Elconin / Bloomberg
Rocket companies
the shares rose up to 75% on Tuesday, as the mortgage originator became the last heavily sold stock to squeeze short sellers.
Trading on Rocket shares (ticker: RKT) was interrupted three times due to volatility on Tuesday. The shares closed at $ 41.60, with a gain of 71.2%. The company is one of the most sold shares on Wall Street, with 39.7% of the shares sold.
The rise in shares comes in the wake of the fourth-quarter earnings of the Rocket beaten last week. Rocket said he made $ 107 billion in new loans in the quarter, exceeding the forecast that required between $ 88 billion and $ 93 billion in origination. The mortgage company also declared a special dividend of $ 1.11 per share.
The company’s stock has been a popular topic in
Twitter
and Reddit’s WallStreetBets, the message board at the center of the GameStop frenzy recently.
“Rocket Mortgage – why was 38% of this company shorted?” tweeted Jim Cramer from CNBC’s Crazy money shortly after 2 pm on Tuesday. “It is a really solid company, it may not be your favorite if rates go up, but it is so well managed!”
Ihor Dusaniwsky, managing director of predictive analytics at S3 Analytics, compared the price of Rocket and short selling activity with the recent negotiations in
GameStop
(GME), MarketWatch reported on Tuesday.
Rocket went public last summer in what was one of the biggest IPOs of the year. At Monday’s close at $ 24.30, the stock had gained about 35% of its $ 18 IPO price. The initial conversation between analysts revolved around whether Rocket, which originates home loans and automobiles using a direct-to-consumer digital platform, should be assessed as a mortgage originator – a company sensitive to fluctuations in mortgage rates – or a technology company with growth potential.
As of Tuesday, the 14 analysts covering Rocket’s shares have an average target price of $ 24.64 and an average Hold rating, according to FactSet.
With the spectrum of higher mortgage rates approaching – the 30-year average fixed-rate mortgage increased last week as Treasury yields increased – Rocket’s administration said demand remains strong in the housing market and rates are still low enough to justify refinancing millions.
“Rates will go up and rates will go down,” said Rocket Companies CEO Jay Farner, on the company’s earnings conference call. “Our real focus is to ensure that we are offering an experience that attracts customers and consumers to our funnel and allows us to increase market share.”
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