However, when May 2021 rolled in, the tone shifted. An earnings call shed light on a stark reality: costs had skyrocketed from a mere $84 million in early 2020 to a staggering $227 million in the initial 2021 quarter. The touted gains? They had dwindled. To investors, this was a stark signal that Home Point might not be the stalwart they were made to believe.
Post revelations, the stock experienced a freefall – a drop of 17.7% to close at a humbling $7.72, a far cry from its IPO standing of $13 per share.
Home Point IPO: The Settlement’s Underbelly
Scratching beneath the surface of this settlement, a few nuances emerge. First, the distribution will cater to those who invested post-IPO until June 21, 2021. Further intrigue ensues as Home Point’s impending acquisition by Mr. Cooper Group, in a massive $324 million deal, weaves its way into the narrative. The acquiring company plans to slowly phase out Home Point’s operations.
With litigation risks looming large, the class of investors had to juggle the complexities. A potential prolonged lawsuit might jeopardize Home Point’s capability to fund the settlement fully.
