Mortgage Lender loanDepot Is Getting a Second Chance at Their IPO

The COVID-19 pandemic brought record-low interest rates. The seller's market became increasingly competitive as buyers opted out of inspections just to get a chance at a contract. Online mortgage lender LoanDepot is seizing this opportunity to go public.

Based in Foothill Ranch, Calif., loanDepot has seen great success from the digital front since they were founded in 2010. As a non-bank, they're proving they can compete with the big guns. 

This isn't the first time that loanDepot has attempted to go public. The first time occurred in 2015 with a goal of raising $510 million. Ultimately, the company decided to postpone the offering, officially withdrawing the deal in 2016. For loanDepot, this withdrawal came at a price. The company incurred a term debt transaction of $150 million.

Now, loanDepot has nearly tripled their projected IPO valuation from their 2015 fundraising goal. Despite the fact that they reported a $100 million goal to the SEC on Monday, Jan. 11, analysts expect this to be a placeholder. The deal could be worth as much as $1.5 billion based on current company valuation.

Private equity firm Parthenon Capital Partners has backed loanDepot since its inception. Underwriters for the deal include big names like Goldman Sachs, Bank of America Securities, Credit Suisse, and Morgan Stanley.

Initially, loanDepot filed confidentiality with the SEC on Nov. 12. They released the news of their filing this week, but the company has yet to disclose any pricing information. For investors, this means we have a few more hoops to jump through until there's a firm and publicized loanDepot IPO date.

What we do know, however, is that loanDepot hopes to list on the NYSE under the ticker symbol "LDI."

In the non-bank mortgage lender sector, loanDepot is seeing great success. According to Inside Mortgage Finance, they're the second-largest retail-focused non-bank mortgage originator (mortgage originators work with underwriters to create loans for borrowers.) In the 12 months ending Sept. 30, 2020, they originated nearly $80 billion in loans. This equated to $3.4 billion in revenue for the company.

If you want to purchase loanDepot stock, you'll have to wait until the date of their public debut. When that happens, you can visit an online brokerage like TD Ameritrade, E-Trade, Charles Schwab, Robinhood, or any other platform that offers IPO stock. 

You may also want to consider investing in the Renaissance IPO ETF ("IPO" on the NYSE ARCA) which holds newly public companies in a sector-diverse basket. As an additional plus, ETFs are more tax-efficient than individual stocks or even mutual funds.

In the draft registration statement with the SEC, loanDepot says, "Our digital-first approach has allowed us to become one of the fastest-growing, at-scale mortgage originators in the U.S." 

Now, they'll have the privilege to test the waters of the public market—as long as they don't withdraw.