![]() Our results suggest that technological innovation has improved the efficiency of financial intermediation in the U.S. "We find no evidence that FinTech lenders target marginal borrowers. "In areas with more FinTech lending, borrowers refinance more, especially when it is in their interest to do so," reads the Fed report. Rocket Mortgage, Quicken Loans' digital mortgage-buying application, which helps position the company as a "FinTech" player, was highlighted as a game changer for the mortgage industry in a 2018 report by the New York branch of the U.S. And (mortgage) is an industry that historically, has been very conservative and not really one where there's been a lot of change." There's probably no bigger investment theme than the power of online (commerce) to transform consumer behaviors and consumer experiences. "(Companies) do best when their particular offering or product hits a big investment theme," said Colas. But equities analysts and other experts point to a host of reasons that generally include some version of estate planning for Gilbert, 58, who had a stroke last year that left him with partial paralysis.īut there's an even simpler reason, according to Nick Colas, co-founder of New York City-based DataTrek Research LLC: Investors and consumers are sure to buy what Quicken Loans is selling.Īnd that's not just mortgages or the stock the company is selling, he said, but the fact that with Quicken Loans' digital offerings, mortgage buyers don't have to leave their couch to buy that product. So why would a company that has largely operated away from the sunshine - aside from its ubiquitous marketing and highly visible presence in downtown Detroit - now choose to subject itself to the mandatory reporting requirements that come with being a public company?Įxecutives at Quicken Loans and incoming board members declined interview requests, citing a federally mandated quiet period. Those numbers made for a 46 percent jump from 2018 and 16 percent higher than the $771 million in pre-tax profits reported in 2017, as Crain's reported. In 2019, Quicken Loans and its portfolio companies reported $898 million in profits, or a 17% profit margin, on $5.1 billion in reported revenue. Indeed, the mortgage lending giant's financials - laid bare for the first time last week in a federal S-1 securities filing - paint a picture of a company in extremely good fiscal health. "They're not one of those biotech companies that's about to run out of money," said Gordon. Ross School of Business: Quicken Loans is in the enviable position of not needing to go public. While many questions remain, there's a simple truth, says Erik Gordon, a clinical assistant professor at the University of Michigan's Stephen M. While a specific valuation remains unclear, and the company has yet to announce a timeframe for when an offering could happen, initial press reports citing anonymous sources have said Quicken Loans could raise somewhere in the tens of billions of dollars. Moreover, the company is led by, and will continue to be controlled by, founder Dan Gilbert, whom investors will have little problem placing bets on, IPO experts say. A company that continues to have room to grow, with a compelling digital business model. Investors will find a mature, highly profitable company near the top of its industry, rather than a cash-bleeding startup with global ambitions. Inc., it will be a different kind of IPO than Wall Street is used to. Once Quicken Loans LLC goes public as Rocket Cos.
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