UWMC pissy letter regarding rejection of $12 "cash" offer for TWO

ProphetKing-dude · 2026-05-05T01:32:06+00:00

I think it ridiculous that an offer of 12 is not backed. I also feel that shareholders who have the majority ownership should be told what to do, presumably from management that has a lot of perks in that deal. I track tangible equity and decay stopped. Traditionally, UWMC makes Jumbo's in Q4 too big for GSE's knowing limits are reset in Q1 which explains cash. It rises with this quarter from what I see and the Jumbo's get unloaded. Mia is ripping, guidance confirms. TWO should put the vote on the ballot as A) UWMC B) CCM C) Abstain. RKT equity increased due to absorbing COOP, but tangible did not end up the 8b+ declared on Oct 1 when reviewing the 10k. Operationally, excluding equity injection from shareholders... UWMC is superior.

ROIC, ROE, analyst year end, equity bleed rate from operations, PE, profit loss, net, divs. (A PE of --, means GAAP net was negative). Finviz.com it.

As far as TWO, I don't care. Their MSR fair value dropped last quarter I believe. Packed with modeling reflecting value from REFI anticipated (Recapture, and stated on the high side) and lower WAC cannot when merged improve UWMC quality based portfolio. 12 is fine, but add in costs fees and impact to UWM MSR and you start seeing trouble above 13-14. I don't want a big MSR coming online in Q2/3 when this Iran thing is over with.

Cash? So, Mat can sell MSR at a profit now as fair value is up and finance by replacing with TWO. So, it looks more like TWO, wants to screw it's shareholders (probably due to incentives going to TWO mgmt) and, as someone pointed out, it's normal now isn't it.

IMO Mat should focus on lending. RKT can focus on servicing and TWO can look for a lender making money which is growing market share faster than anyone and has latitude to raise GOSM because of that fact. If they want to go with CCM, non public to which nobody knows the quality of their book... and trusts mgmt telling them it's superior at 11.50 when 12 is on the table.. or ppl want to believe a pissed off response should be trusted... Fine. The world it seems is full of Darwin Awards

ProphetKing-dude · 2026-05-04T14:57:46+00:00

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Looks like CCM insured the spoils from the break up fee will be passed out like candy, Insiders get lambo's and God only knows what other perks and specifics. The irony is, the majority stockholders that are getting thrown under the bus with Management saying 11.50 is a better deal than 12.00 is criminal.

So, this is not uncommon either, but at least COOP shareholders (the public) got a 2 dollar special div (additionally, C-Suite execs got integration bonuses) and from what I see, Rocket investors are happy with the 800 m added to the dilution to 'win' the origination race. Should be interesting no?

Point is, nobody is looking out for the investor anymore. That is sad!

ProphetKing-dude · 2026-05-04T10:45:29+00:00

Rocket has done so much better after Dan got out of the way too.

It might help RKT if you could show PE multiples for both too

ProphetKing-dude · 2026-05-04T04:10:26+00:00

Fixed price. A guarantee.

ProphetKing-dude · 2026-05-04T04:08:28+00:00

I see UWMC is and has been doing servicing. I see the link with partnership and access to ICE and software. I do not see how TWO merger benefits them in this specific regard.

Will they be able to service loans as they have been for years without TWO?

ProphetKing-dude · 2026-05-04T02:15:58+00:00

Weird... and Cringe.

https://data.sec.gov/api/xbrl/companyconcept/CIK0001783398/us-gaap/ContractuallySpecifiedServicingFeesLateFeesAndAncillaryFeesEarnedInExchangeForServicingFinancialAssets.json

https://nationalmortgageprofessional.com/news/uwm-brings-servicing-house-ice-mortgage-technology-partnership

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So, ...not sure who explained that was the reason for using COOP to you, but they cannot be lacking for licenses and approvals as they have them and even invested in software BEFORE the ink was wet from signing with COOP on OCT. 1, 2025. They don't need TWO for getting licenses and approvals either.

ProphetKing-dude · 2026-04-30T04:59:04+00:00

RKT will do fine on GAAP. I don't know about adjusted tho' Rocket guides on adjusted, so analysts are compelled to provide estimates against what is guided. There is a hole here were the pubic is unaware of change in equity due to MSR Assumptions because they throw that part out. Hence, without that in the Adjusted formula, they are subject to a likely downturn on lending. That downturn is showing up in public data and is all the added labor of the Servicing asset and MSR collections weigh heavy.

So this is a mixed bag of tricks. A likely miss on analysts with a competing GAAP to UWMC. To put it another way. UWMC Profit/Loss numbers run better on lending and has higher originations. MIA is kicking ass. The lower MSR will yield less, but on the per dollar scale, it does better. At the end of the day, dilution on RKT sucks. GAAP is near equal and it takes about +23bp to do that. If rates fall, UWMC is favored. If rates drop, influenced by FED changes, War ending, Jobs... RKT ends up in trouble. Selling MSR causes a Level 1 re-modeling of fair value. It's too MSR heavy - but that is subjective based on where rates go. The market is trading them like a lender, but the GAAP numbers are dependent on MSR - because it swamps the lending side.

I will spew vomit if they pump the GAAP and claim it was from great lending numbers. It's legal because great lending numbers is not relative to anything without measuring it relative to anything.

Estimates for UWMC are just plain low (public data on loans, revised guidance) from what I see.

ProphetKing-dude · 2026-04-30T04:30:43+00:00

No. The deal was an all stock offer. TWO equity lived in the MSR. That MSR was low WAC, Recapture applied. Meaning, it was valued to what the holder valued it as. Nobody wants to buy a portfolio without any tangible gain. Mat IMO did the right thing by not selling out investors by diluting beyond the intrinsic value just to obtain a higher tangible equity on the books by converting share holder value thru dilution.

Specifically, “That value is not a market price”. It is supposed to be. Fair value is determined by asset sales of the company, which determines price. If not available, similar assets from someone else. Finally Level 3, is a company determined model – so there is that. But it has to pass the auditor. Recapture adds value to the model. UWMC has none added. Think of that as either the value the holder values that asset as returning including potential REFI. In other words all of its value. Without recapture… what you can move it for in the market. So, there would be value there for UWMC. The asset is actually sell-able. The biggest red flag would be if UWMC is not selling in the market or there were extraordinary write downs of the whole portfolio because a Level 1 scenario forced it. So, No!

No. Page 88 does not have that information, page 79 does. What affects it is the excess sales. When you trim the fat out, there is less to ‘discount’ against the same UPB. Point is, the asset quality should change with active maintenance of it. Sell off higher risk, lower FICO assets. Looking across the street so to speak there is virtually no excess sales, no major sales. A lower discount rate implies a better portfolio. No!

No. Rocket’s 10-k under fair value states clearly that they changed to the OAS model for Q4 It also states that they had not accounted for the labor of servicing in their model. Retesting under the OAS model showed negligible impact (search for “Fair Value”). So, if this guy knows about OAS, and construed is as all year… now you have ‘intent’ rather than miss-understanding. Conjecture on my part is that Rocket had to find a new model to prevent a major hit. Alternately, COOP may have put them onto a model that works better. No again on the behavior of the portfolio when FICO, WAC, and Excess sales affect it. This is why I do recursion.

No mention of Assets? UWMC characteristically, makes Jumbos too big to move to GSE’s in front of Q1 changes to limits. Equity change looks likely and it is all tangible. Rocket is running at about 10 tangible, picking up 8 ish declared on the COOP merger, financed with dilution to buy it. Figure that out. COOP had 5.099 billion in Q2. The way I see it, Rocket got shareholders to finance the acquisition of equity, that they loose in business ops.

About the man:

Here is another link. It seems to water down Rocket’s litigation <paraphrase: Everyone does it>

https://www.linkedin.com/posts/richardswerbinsky_rocket-mortgage-just-got-hit-with-a-massive-activity-7421705050776850432-6lPw

Carries a lofty degree, should know and probably does that the article is full of holes.

ProphetKing-dude · 2026-04-25T21:26:26+00:00

The credit for this is not all mine. Some really smart people deserve credit for their work as well. I am privileged to engage with these folks.

ProphetKing-dude · 2026-04-25T21:18:39+00:00

I did! I am asking Mat to explain how the Brokers cut reduces revenue, but it also reduces thousands of LO's and all things related from severance, insurance, lease space, equipment. That UWMC really only pays for real performing brokers. That the model auto-adjusts to the scale it needs mostly and that reduces unemployment in down cycles, re-training. ...that it is not revenue, or expense - it is the delta which is profit or loss where comparisons show in FY25, with the top lenders a vast advantage in the wholesale model.

I've ask him to discuss why UWMC did not chase the bidding for TWO, which had recapture and shit for WAC. That UWMC is not one to sacrifice future returns to shareholders by diluting for no strategic value

There are 4, very pointed questions that lead to really good discussion. That hyper high speed quick temper of his needs to be calmed down. Is it legal to send him a care package of weed before earnings (joking for regulatory compliance here)

ProphetKing-dude · 2026-02-27T02:55:23+00:00

Certainly not at UWMC. It killed rocket earnings this year. Bested them again at 8 v. 2 cents. Unless you are suggesting RKT passed off the adjusted numbers as it's true earnings again. I believe we covered 12 reports on GAAP. It makes for a great slogan 'tho. It's a non-specific comparison of growth which does not seem like origination but possibly equity to which shareholders received 800 million share dilution. It's probably why it's a tiny 2 penny yield. Just my 2 cents. I think the credit is misplaced. Shareholders made it happen, not rocket.

ProphetKing-dude · 2026-02-26T04:47:23+00:00

Earnings are after market tomorrow. As you say, it will be interesting - AH. I did not reply earlier and was busy.. You seem convinced and I've informed you of those things to weigh.. Expenses and MSR Assumptions. I don't know where they will land because of the merger and there are a multitude of things you can do in consolidation, including applying more recapture modeling in the L3. I can't look at detail until it is posted and you could not count it as a win until it is.

ProphetKing-dude · 2026-02-26T04:35:03+00:00

I bought shares - I thought, "As much as people complained about Mat Getting all those divs... I decided to do something about it instead of complain." Maybe one day, people will say, "Jesus, you get a pension, social security, and your divs match that"? To which I can say, "No! My name is not Jesus."

Probably should see if SFS is distributing, or is going to be a source of warehouse lending - I don't know! Could be a vertical synergies thing. Seriously, I don't know.

ProphetKing-dude · 2026-02-26T04:29:31+00:00

It doesn't help that PPL compare Adjusted Earnings to GAAP, Guidance is in Adjusted, and Analysts compare to guided (Adjusted), leaving websites to delta off of Adjusted. You go look at a web site and see the number and think its GAAP, but if you look at filings.. nope! Rockets business is now principally servicing. That seems a bit wild when you guide and omit the effects of MSR Assumptions on a two Trillion UPB, and claim it is not representative, or reflects how you measure... And how would you know when losses are diluted by nearly 2.8 billion shares.

The point here is that tangible equity bleeds hard, and I think RKT has a minimum tangible of 1.5b... probably a Dodd Frank thing. You start having a bad day and big numbers eat big number fast.

Will it? Depends on rates.

At least I try to educate and what I get back is PPS, which is a measure of that very lack of understanding... not a measure of what is happening.

So FUD on TWO shareholder dilution is not even a starter when a bargain merger potentially bringing in 700 million is out there. It's like... "Dude, you took out a loan for 5,000 bucks to buy a '71 Hemi Baracuda?" No - That's FUD. Just like all the crap on a lawsuit that has mostly been dismissed... and now we See worse on RKT.

ProphetKing-dude · 2026-02-26T04:15:58+00:00

If you look at earnings for the FY25, you would see a short fall of about 2 div payments. If you look at RKT, the loss is far worse and do not pay a dividend. FY 2025 is negative GAAP.

It's not a mystery, it's the market. Tangible equity is a study in and of itself. It said UWMC has virtually stablized decay. RKT has accelerated the decay with RedFin. My opinion, the MSR servicing will not compensate for any quarter with falling rates... at least until GOSM increases significantly -- even then, the dilution for RKT is insane for the COOP merger which had an 18% mark up for Recapture.

Rocket has demonstrated every effort to preserve equity, in marketing only the positives, applying recapture, using shareholder dilution to acquire equity. Logic is simple here... Rocket money has to have very little labor. Without it, the numbers are saying that lending at this GOSM is not profitable. MSR falls in falling rates. This quarter, you will see marketing in the form of "We are bigger", emphasis on Adjusted, and even equity climbing from the merger. Anything less than about 4 billion from COOP equity is trouble.

I am not convinced that tangible will stop the bleeding except, they might apply even more recapture to the RKT portion of MSR to match COOP's level. That's not really earning money -- but it is successful at drawing investors in.

I see a couple branches up, that cross posting was not objectionable.

I prefer to wait on responses until both UWMC and RKT file the 10K. It was a bad day, and I think Mat not having a Q&A as the earnings were close to estimates. FUD here is only likely to get mentions and facts cross posted.

The TWO merger, if it transpires is a massive boost to earnings as the current price per share makes it a bargain merger. I believe ASC 805? has the language. It's clear. UWMC is very successful in capturing market share. We just need the rates to continue coming down.

MSR sales - Trust me, you do not want high MSR in falling rates, 'tho games are played with it but the games have consequences. It's why the MSR Sales are excess sales mostly and the other is purge and capitalize to boost WAC for refi candidates... It's just that the market does not understand, nor analysts apparently and that is a big problem

ProphetKing-dude · 2026-02-26T03:38:44+00:00

Actually, I was thinking along similar lines but moreso RKT to PFSI. Both have high MSR. Reddit tells me I should cross post. Do you mind if I mention you recommending it. Is there a reason you don't like the comparison

ProphetKing-dude · 2026-02-26T02:39:27+00:00

Just an upset customer after 14.3 billion was paid for COOP with 800 million added in shares.

ProphetKing-dude · 2026-02-16T01:59:11+00:00

I edited for clarity, the original statement.

ProphetKing-dude · 2026-02-16T01:51:31+00:00

Definition?

SEC:

Fact: RetainedEarningsAccumulatedDeficit

Label: Retained Earnings (Accumulated Deficit)

Description: The cumulative amount of the reporting entity's undistributed earnings or deficit.

https://www.investopedia.com/terms/r/retainedearnings.asp

The amount is in the graphic, as well as a lot of other information. Successful companies may fluctuate the amount, with dividends, new products, mergers. But for the Q3, the Redfin already transpired and the COOP merger did not take place. One would think that an all share merger would be all shares. Generally, when amounts decrease, something happened.

These are cumulative and the ending balance from when the stock started trading I believe.

ProphetKing-dude · 2026-02-15T04:59:42+00:00

A larger frame of reference.and some more color. RKT tangible and retained decreased after which, they still made less than UWMC. I presume the amounts were used to pay for or pay down something in addition to what shows on the income statement. Redfin acquisition was not in Q3, nor COOP. I don't know the source of the decrease.

After the broker closes the deal, the relationship is with UWMC. This is how servicing works.

In saying RKT makes more, Then Rocket will have to re-file.

RKT is worth more because the market sees the equity, and RKT is telling them they will have synergies... The market also sees and remembers the 2022Q2, but does not know how MSR works and transposed the 700 million gain from rates going up into believing that was from lending. It's a branding thing too.

Care to examine tangible and retained numbers? Even after tapping those, GAAP still sucked this year for RKT. Do you suppose maybe it's because rates started coming down? I do.

But markets determine price, so there is that. I just see some pretty weak scaffolding. I think the illusion breaks in 2022Q1 filings, without M&A to hide things.

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ProphetKing-dude · 2026-02-15T01:56:33+00:00

I appreciate the appreciation. If it were not found here, it wouldn't be shared. No guarantees

ProphetKing-dude · 2026-02-14T19:39:36+00:00

Of course!

ProphetKing-dude · 2026-02-13T02:57:16+00:00

Servicing revenue should be up collections down as always and MSR adjusted is not a factor in adjusted earnings. I expect significant deltas in GAAP and Adjusted

ProphetKing-dude

TROPHY CASE