United Wholesale Mortgage debuted Friday in public trading, the largest listing in history through a special-purpose acquisition company.
Shareholders of Gores Holdings IV Inc. approved this week a merger with the company, now called UWM Holdings Corp., in a deal to make it public at a valuation close to $ 16 billion. According to data provider SPACInsider, it marks a record number of SPAC deals, which have become fashionable on Wall Street.
The Michigan-based mortgage company, which was listed on the New York Stock Exchange under the symbol UWMC, closed at $ 11.35 on Friday, slightly below the closing price of Gores Holdings of $ 11.54 on Thursday. .
SPACs, also known as blank check companies, take a reverse turn to the conventional model of bidding because they raise money before developing a business. They use the funds 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 on Thursday, that company obtains the 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 service mortgages. It is one of the non-bank mortgage companies that embraces public markets at a booming time for the US real estate market. Low interest rates helped boost mortgage origination to record levels in 2020. UWM was the third largest mortgage lender in the U.S. in the first three quarters of 2020, according to industry research group Inside Mortgage Finance.