UWM: Why Common Shareholders Must Now Wait Before Any Recovery

Walk through the cascade of pressures on the mortgage industry and UWMC: elevated rates, 10b5-1 selling plan, and a $603 million hedge loss tied to the failed Two Harbors deal that's driven the stock down nearly 70% YTD. The core business remained profitable underneath the Q2 loss, but the over-hedged derivatives and subsequent Oaktree Capital preferred raise have left common shareholders like myself with a much longer recovery timeline. Real progress on the preferred pay down, sustained operating results, and eventual restoration of capital returns will determine whether UWM can reclaim a healthier valuation of itself.

UWM Holdings Corporation (UWMC) just delivered its worst quarter I've covered in three years of writing about the company. The stock is down nearly 70% YTD, the dividend is suspended, and my 5,300 share position I've dollar-cost averaged into $4.41 (do the math).