United Wholesale Mortgage plunges 40% after suspending dividend and raising capital

Corporate Action Impact 4
โดย CNBC·US·Read original
Summary · why it matters

Shares of UWM Holdings, parent of United Wholesale Mortgage, plunged 40% on Thursday after the largest U.S. mortgage lender suspended its quarterly dividend and announced a $2.05 billion equity investment from Oaktree Capital Management and SFS Group Capital LLC, a newly formed vehicle owned by the family of CEO Mat Ishbia. The company said the dividend suspension is intended to preserve capital, while the capital raise comes as its financial position weakened, with total equity falling to about $1 billion as of June 30 from $1.6 billion at the end of March and available liquidity at approximately $1.3 billion. UWM lost $451.9 million on revenue of $888 million in the second quarter, reversing net income of $170.4 million in the prior quarter and a profit of $314.5 million a year earlier. Mortgage originations totaled $39.7 billion in the second quarter, down from $44.9 billion in the first quarter but unchanged from a year earlier. The moves occur amid a tough operating environment for mortgage lenders, with elevated mortgage rates keeping homebuyers on the sidelines and limiting refinancing activity.

Impact on stocks 1

Financials▼ · 1 stocks
UWM Holdings Corp
UWMC
▼ NegativeCapitalrelevance

Suspended dividend and raised capital due to weakened financial position, with Q2 loss and declining equity.

Off-coverage companies 2

Oaktree Capital ManagementPrivate▲ Positive
Capitalrelevance

Oaktree is investing $2.05 billion in UWM, potentially gaining from the deal.

SFS Group Capital LLCPrivate▲ Positive
Capitalrelevance

SFS Group Capital, owned by CEO's family, is part of the $2.05 billion equity investment.

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