27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
United Wholesale Mortgage — the biggest U.S. wholesale mortgage originator — is looking to go public via merger with the special-purpose acquisition company (SPAC) Gores Holdings IV Inc (NASDAQ:GHIV). The transaction values United Wholesale Mortgage at $16.1 billion, a record for a SPAC deal, or 9.5 times the company's estimated 2021 adjusted net income of approximately $1.7 billion.
The Wall Street Journal first reported the news.
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What Happened: Gores had raised $425 million in a public listing in January. United Wholesale Mortgage plans to combine with the SPAC via a merger. The combined company will operate under the United name and list on the NASDAQ under the ticker symbol UWMC.
Under the agreement, United Wholesale will retain approximately 94% ownership of the combined company and get $425M in cash held in Gores's trust, reports Reuters. The company will also raise $500 million from a private placement.
The deal is expected to be done by the end of the year.
Deutsche Bank and Morgan Stanley acted as lead financial advisors, lead capital market advisors and exclusive private placement agents to Gores Holdings IV, while Moelis & Company acted as financial advisor. Goldman Sachs acted as financial advisor to United Wholesale Mortgage.
Why It's Important: SPAC deals are on the rage on Wall Street as startups and private companies look to exploit this route to go public expeditiously.
Blank check companies have been a key driver for initial public offerings in 2020 accounting for 44% of total volume and raising a record $40 billion, which is four times the volume for 2019.
High-profile investors like Bill Ackman and Michael Klein have raised billions through SPACs this year. Other notable people on the SPAC bandwagon are former House Speaker Paul Ryan and Gary Cohn, an ex-economic aide to President Trump.
Detroit Connection: United Wholesale Mortgage, also known as United Shore, is based in Pontiac, Michigan. Gores Holdings is led by Alec Gores, whose brother Tom has owned the NBA's Detroit Pistons since 2011.
The move to go public comes less than two months after mortgage giant and fellow Detroit-area company Rocket Companies Inc (NYSE:RKT) went public. Rocket trades around $21.57 per share, above its IPO price of $18 per share.
Price Action: GHIV shares have jumped 11% pre-market to $12 at the time of publication Wednesday.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.