Foothill Ranch, California-based loanDepot Inc., the online mortgage lender founded by industry pioneer Anthony Hsieh, announced abruptly Thursday afternoon that it was withdrawing an initial public offering it had planned to launch on the New York Stock Exchange this morning.
“LoanDepot withdrew our plan to pursue an IPO at this time, due to market conditions,” said company spokeswoman Julie Reynolds.
Reynolds declined to specify the conditions she was referring to or how they influenced the loanDepot decision. She also declined to say whether the IPO was merely being postponed or was canceled.
Thursday was certainly not a great day in the stock market for the mortgage industry. S&P’s Mortgage Finance Index dropped 2.44 percent, a much bigger tumble than the 1.4 percent drop in the overall S&P index.
The mortgage index is still up nearly 4.2 percent in 2015.
The IPO terms loanDepot announced earlier this month would have valued the company at $2.4 billion to $2.6 billion.
An article in Inside Mortgage Finance, a well-known industry newsletter, said loanDepot’s IPO pricing may have been too ambitious. It had planned to sell up to 34.5 million shares at as much as $18 each, “a lofty valuation for a company that owns just over $20.9 billion in mortgage servicing rights,” Paul Muolo, the newsletter’s managing editor wrote.
“Few in the industry are questioning loanDepot’s explosive growth since its inception five years ago, but eyebrows have been raised about the anticipated size of the deal,” he said.
Muolo quoted a stock analyst who argued that loanDepot’s anticipated IPO price was “especially aggressive given that it’s being priced after a weak earnings season.”
And he cited analysts who suggested loanDepot’s mortgage servicing portfolio justified a valuation of “maybe $210 million,” rather than the range of $480 million to $540 million in gross proceeds it had expected to garner.
Bloomberg News contributed to this report.