Acquisitions may be forthcoming for the Rocket companies

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Ahead of his company’s NYSE debut on Thursday, Dan Gilbert told CNBC that Rocket Companies may make acquisitions to further leverage its mortgage technology.“We want to use our stocks as a bargaining chip and potentially acquire more FinTech organizations and put them in the mold,” said Gilbert, president of Rocket Companies, which he founded in 1985.

Rocket Companies closed up 19.5% Thursday at $ 21.51 per share. The Detroit-based company sold 100 million shares at $ 18 each when it went public, which was below targets of 150 million shares in a range of $ 20 to $ 22.

He suggested investors value Rocket Companies – America’s largest mortgage lender and parent company of Quicken Loans – more as a financial services company and less as a technology company, Reuters reported Wednesday.

“This is one of the big points of contention. We think we’re a tech company that does home loans, ”billionaire Gilbert said on“ Squawk Box ”.

Quicken Loans Rocket Mortgage is known for its fast, online mortgage application and refinance services. In addition to its core home loan business, Rocket Companies also has a personal and auto finance segment. It also has sites such as ForSaleByOwner.com and LowerMyBills.com.

Gilbert touted Rocket Companies’ ability to develop the technology to power Rocket Mortgages as one reason acquisitions could be on the horizon.

“You make mortgages in 3,000 counties and 50 states. Everyone is different. Each has to be fleshed out, every part of it. Once you make the mortgage electronically or digitally, any other type of transaction is less burdensome. , ” he said.

“We think that with public stocks, if we go out and buy companies, we can help them really get things done, because the mortgage was the hardest part,” continued Gilbert, who also owns the Cleveland Cavaliers. NBA.

In its S-1 filing with the Securities and Exchange Commission, Rocket Companies reported net income of $ 5.1 billion in 2019 with profits of $ 893.8 million. The company also said in the filing that it had a record mortgage loan origination in March, April, May and June of this year, despite the impacts of the coronavirus pandemic on the economy.

“This month we’re going to close 100,000 mortgages in 50 states, so we know the technology platform is there. We know how powerful it is, and we’ll just continue to demonstrate it to the market, ”said Jay Farner, CEO of Rocket Companies, later on CNBC’s“ Squawk Alley ”.

Farner said the year had been a strong one for Rocket Companies and suggested that a dividend for shareholders could also be on the table. However, he said they did not have a timeline on when this might be offered, saying “our first priority is always to reinvest in our business”.

“But when you have a year like the one we are in now where our current EBITDA margins are north of 70% and we are looking at volumes ranging from $ 15 billion to now $ 30 billion, you can calculate that number,” Farner said. “It’s going to be an amazing year for us, so we just want to keep all of our options open and the dividend could be a real option for our shareholders. “

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