What Happened?
Shares of fintech mortgage provider Rocket Companies (NYSE: RKT) jumped 3.2% in the morning session after Shares of Rocket Companies (RKT) rose 2.96% in the morning session on continued positive momentum following major progress on its pending acquisition of Mr. Cooper Group.
The stock is building on gains from the previous session after Mr. Cooper shareholders voted to approve the merger. Further boosting investor confidence, Rocket extended tender offers related to the acquisition, noting very high participation rates (88% to over 98%) from noteholders. This strong support signals confidence in the transaction and helps smooth the debt restructuring process required for the deal. As a result of the rally, Rocket's shares have now crossed above the average 12-month analyst price target of $17.55, which could prompt analysts to re-evaluate their ratings and potentially raise their targets.
After the initial pop the shares cooled down to $18.46, up 3.2% from previous close.
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What Is The Market Telling Us
Rocket Companies’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 3.9% on the news that the company announced an extension for its tender offers related to its pending acquisition of Mr. Cooper Group, signaling strong progress in the deal. The company extended the expiration date to September 30, 2025, for tender offers and exchange offers on several senior notes issued by Nationstar Mortgage Holdings, a subsidiary of Mr. Cooper. This move is not seen as a delay but rather as a necessary step to align the note purchases with the closing of the acquisition. Crucially, the offers have seen very high participation from noteholders, with acceptance rates ranging from approximately 88% to over 98% across different notes. This strong support from noteholders is a positive indicator, demonstrating their confidence in the transaction and helping to smooth the debt restructuring process required to finalize the acquisition of Mr. Cooper Group.
Rocket Companies is up 70.1% since the beginning of the year, but at $18.46 per share, it is still trading 10.7% below its 52-week high of $20.67 from September 2024. Investors who bought $1,000 worth of Rocket Companies’s shares 5 years ago would now be looking at an investment worth $751.16.
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