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United Wholesale Mortgage debuted on the stock exchange on Friday, the largest listing ever through a special purpose acquiring company.
Shareholders of Gores Holdings IV Inc. this week approved a merger with the company, now called UWM Holdings Corp., as part of a deal to go public at a valuation of nearly $ 16 billion. This marks a record for SPAC deals, which have become very popular on Wall Street, according to data provider SPACInsider.
The Michigan-based mortgage company, traded on the New York Stock Exchange under the symbol UWMC, closed at $ 11.35 on Friday, slightly below Gores Holdings’ $ 11.54 closing price on Thursday.
PSPCs, also known as blank check companies, reverse the conventional model of public offerings as they raise funds before they develop a business. They use the funds to make an acquisition that turns the target into a public company. Once the blank check company merged with a target company, as Gores Holdings and UWM did on Thursday, that company gets the spot for SPAC on the stock exchange, allowing it to sell shares to the public.
UWM works with independent brokers across the country to underwrite and service mortgages. It is one of many non-bank mortgage companies to embrace the public markets at a booming time in the US real estate market. Low interest rates helped push mortgage creations to record highs in 2020. UWM was the third-largest mortgage lender in the United States in the first three quarters of 2020, according to industry research group Inside Mortgage Finance.
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