Mortgage lender UWM plunges after dividend suspension, $2.05 billion equity investment
UWMC•Shares plunge after dividend suspension and quarterly loss
Mortgage lender UWM's UWMC.N shares plunged as much as 49.4%, and were last down 42.4% at $1.06.
UWMC late Wednesday announced a quarterly dividend suspension to prioritize debt reduction; it also swung to a $451.9 million Q2 loss.
$2.05 billion equity investment to strengthen balance sheet
The company also unveiled a $2.05 billion equity investment with the Ishbia Family and Oaktree to strengthen its balance sheet.
The initial investment was made in the form of preferred equity, together with warrants.
"We view the capital commitment favorably as UWMC has sustained market share, and consider this a positive development on the heels of the TWO acquisition not occurring" - Stephens analyst Kyle Joseph.
UWMC's proposed Two Harbors Investment TWO.N acquisition fell through earlier this year.
KBW analyst Bose George expects the shares to be weak as the capital need was much larger than expected.
As of the last close, UWM stock was down 58% year to date.
