Lawsuit filed for Investors in shares of Rocket Companies, Inc. (NYSE: RKT)

An investor, who purchased shares of Rocket Companies, Inc. (NYSE: RKT), filed a lawsuit over alleged violations of Federal Securities Laws by Rocket Companies, Inc.

Investors who purchased shares of Rocket Companies, Inc. (NYSE: RKT) have certain options and for certain investors are short and strict deadlines running. Deadline: August 30, 2021. NYSE: RKT investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Detroit, MI based Rocket Companies, Inc. engages in the tech-driven real estate, mortgage, and eCommerce businesses in the United States and Canada. It operates in two segments, Direct to Consumer and Partner Network.

On May 5, 2021, Rocket Companies, Inc. announced its first quarter results and issued its second quarter 2021 outlook. Rocket Companies reported that it was on track to achieve closed loan volume within a range of only $82.5 billion and $87.5 billion and gain on sale margins within a range of only 2.65% to 2.95% for the second quarter of 2021. At the mid-point, this gain on sale margin estimate equated to a 239 basis point decline year-over-year and a 94 basis point decline sequentially, which represented Rocket Companies’ lowest quarterly gain on sale margin in two years.

During a conference call to explain the results, Rocket Companies’ Chief Financial Officer and Treasurer, Julie R. Booth, revealed that the sharp decline in quarterly gain on sale margin was being caused by three factors: (i) pressure on loan pricing; (ii) a product mix shift to Rocket Companies’ lower margin Partner Network segment; and (iii) a compression in price spreads between the primary and secondary mortgage markets. Booth also admitted that certain of these trends began “at the end of Q1.”

Shares of Rocket Companies, Inc. (NYSE: RKT) declined to $16.22 per share on May 13, 2021.

The plaintiff claims that between February 25, 2021 and May 5, 2021, the defendants made false and misleading statements and failed to disclose that Rocket Companies’ gain on sale margins were contracting at the highest rate in two years as a result of increased competition among mortgage lenders, an unfavorable shift toward the lower margin Partner Network operating segment and compression in the price spread between the primary and secondary mortgage markets, that Rocket Companies was engaged in a price war and battle for market share with its primary competitors in the wholesale market, which was further compressing margins in Rocket Companies’ Partner Network operating segment, that the adverse trends identified above were accelerating and, as a result, Rocket Companies’ gain on sale margins were on track to plummet at least 140 basis points in the first six months of 2021, that as a result, the favorable market conditions that had preceded the Class Period and allowed Rocket Companies to achieve historically high gain on sale margins had vanished as Rocket Companies’ gain on sale margins had returned to levels not seen since the first quarter of 2019, that rather than remaining elevated due to surging demand, Rocket Companies’ company-wide gain-on-sale margins had fallen materially below pre-pandemic averages, and that consequently, defendants’ positive statements about Rocket Companies’ business operations and prospects were materially misleading and/or lacked a reasonable basis.

Those who purchased shares of Rocket Companies, Inc. (NYSE: RKT) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.