United Wholesale Mortgage made its public debut on Friday, the biggest listing ever through a special-purpose acquisition company.
Gores Holdings IV Inc. shareholders this week approved a merger with the company, now called UWM Holdings Corp., in an agreement to make it public with a valuation close to $ 16 billion. It is a record for SPAC businesses, which have become fashionable on Wall Street, according to data provider SPACInsider.
The Michigan-based mortgage, traded on the New York Stock Exchange under the symbol UWMC, closed at $ 11.35 on Friday, just below Gores Holdings’ closing price of $ 11.54 on Thursday -market.
SPACs, also known as blank check companies, invert the conventional model of public offerings because they raise money before developing a business. They use the proceeds to make an acquisition that turns the target into a public company. Once the blank check company merges with a target company, as Gores Holdings and UWM did Thursday, that company takes SPAC’s place on a stock exchange, allowing it to sell shares to the public.
UWM works with independent brokers across the country to underwrite and pay mortgages. It is one of several non-bank mortgage companies that are embracing public markets at a time when the United States housing market is expanding. Low interest rates helped drive mortgage origins to record levels in 2020. UWM was the third largest US mortgage lender in the first three quarters of 2020, according to the industry research group Inside Mortgage Finance.