There’s something about Michigan and mortgages that traders on Reddit’s r/WallStreetBets subreddit seem to like. Flint’s UWM Holdings (NYSE:UWMC) is up more than 24% in pre-market trading. That move follows UWMC stock’s 19.7% gain on Tuesday as volume was four times the daily average.
UWM Holdings, better known as United Wholesale Mortgage, has a market capitalization of more than of $16 billion, following its coming public in a merger with blank-check company Gores Holdings IV in January, in the largest-ever special purpose acquisition company (SPAC) transaction.
In that transaction, UWM received about $895 million, comprised of approximately $395 million of cash from Gores, as well as $500 million in proceeds from the private placement completed in connection with the merger.
UWMC Stock Following Familiar Path
It was about this time yesterday that we were all over a huge pre-market move in the shares of Detroit’s Rocket Companies (NYSE:RKT), another mortgage originator. By the end of the day, RKT stock was up 71.2%, leading short-position research firm S3 Partners to warn clients that “Rocket Shorts are Crashing and Burning.”
Short interest in UWMC stock is on the rise, with the ratio at 1.9 days to cover, or 13.21% of the float, as of Feb. 12.
As well, the company announced on social media yesterday that it is under consideration to be included among newly minted stocks for the Russell 1000 and Russell 3000 indices.
To be sure, macro factors could also be at work on the mortgage originator’s shares.
As a mortgage originator, UWM has much at stake in the direction of interest rates, and the 10-year U.S. Treasury note, specifically. The yield on those bonds, which increased to more than 1.6% last week, was 1.458% yesterday.
That level may be enough for investors to gain a bit of confidence in the state of the home financing market in the weeks and months ahead. Any slippage is a good omen for potential home purchases and refinancing.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.