Rocket leads mortgage sector surge in GameStop-style short squeeze
- Rocket, parent of Quicken Loans, was up 6.2% at $44.12 in premarket trading, following Tuesday's 71.5% surge. UWM Holdings was trading 19.3% higher at $10.90.
- The company, which struck a deal last year to go public via a SPAC deal, has also gained favor with retail traders online.
Shares in mortgage lenders UWM Holdings Corp and Rocket Companies jumped in early deals on Wednesday as the new targets of a short-squeeze gain popularity on internet message boards.
Rocket, parent of Quicken Loans, was up 6.2% at $44.12 in premarket trading, following Tuesday's 71.5% surge. UWM Holdings was trading 19.3% higher at $10.90.
The company, which struck a deal last year to go public via a SPAC deal, has also gained favor with retail traders online.
The latest gains have placed Rocket and some other mortgage lenders among stocks that have seen wild swings after becoming a focus of investors on sites such as Reddit's WallStreetBets, where mentions of the company have multiplied in recent days.
Message volume related to Rocket on trading-focused social media site Stocktwits more than doubled, data on Wednesday showed, with more than 94% of posts featuring positive sentiment toward the stock.
On Tuesday, Rocket's market capitalization rose by more than $34 billion to $82.6 billion. Its shares are currently heavily shorted, leaving them vulnerable to a short squeeze, where investors betting against a company's shares are forced to unwind their positions after a rally.
Investor appetite towards mortgage vendors this month is in stark contrast to their recent outlook towards the sector. A slew of canceled initial public offerings in recent months pointed to fears that the US housing market may have reached a peak.
Shares of a few other companies in the sector also rose premarket, with those of residential mortgage platform provider LoanDepot trading 4.2% higher to $24.550, although in thin volumes.
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