Shares of UWM Holdings Corporation [NYSE: UWMC] skyrocketed 18.26% at the time of writing on Friday. The strong performance of the stock of the firm comes after the company disclosed that it has decided not to pursue an earlier declared secondary offering of Class A Common Stock.
The offering was planned to increase UWMC’s public float by roughly 50%, thereby making it a more liquid, tradable stock for larger indexes and institutional investors, whilst employing the Company’s buyback agreement to cut the number of fully diluted shares outstanding. But the news has ignited the new reaction of the investor which forced the company not to pursue the secondary stock offering.
Furthermore, the company is planning to speed up its earlier declared buyback program and defer its plans to increase public float to a later date. The company disclosed that the offering was ended by its principal shareholder SFS Holding Corp. The aim of the offering was to enlarge UWM’s float and surge liquidity thus facilitating indexes and institutional investors to select the stock.
In addition, Company’s Chairman and CEO revealed that as the principal owner of SFS, he was agreed to sell a percentage of his ownership in UWM at less than what he thought to be fair value because the company was recommended that increased float in the public market would be advantageous for the UWMC shareholders, including its largest shareholder, SFS.
He further stated that the financial and operational results of the company in both the third quarter and in previous quarters were exceptional. He contemplates that both as the CEO of UWM and the controlling shareholder of UWMC, that the Company is ready for even better performance in the upcoming quarters.