Rocket Companies (RKT) closed at $10.83 on October 13 and has fallen roughly 30% over six months. A year ago it bought Mr. Cooper for $14.2 billion, becoming the largest in the country in both mortgage lending and servicing, with close to 10 million homeowners paying through it. Revenue grew 91.9% in the latest quarter, mostly from the acquisition, but return on equity was only 3.03%. The article notes that servicing income is largely unaffected by mortgage rates, while lending falls when borrowing costs rise, so the two businesses offset each other. Profit has lagged the company's size because the Mr. Cooper deal was paid in shares, enlarging equity, and Rocket wrote down the value of the acquired businesses, which it names as the reason for the sharp rise in that charge.
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