RKT Stock – Mat Ishbia’s Hot Hand: From a Motivated Basketball Competitor to a Mortgage Industry Giant
With a degree from Michigan State University’s business school, the overachieving third-string point guard morphed over two decades into a feisty 41-year-old chairman and chief executive.
Growing up in Birmingham, Mat Ishbia made his mark as a standout on the Seaholm Maples high school basketball team from 1995 to 1998 — his scrappiness and grit more than compensating for his modest 5’9” height.
As an athletic kid from the suburbs with dim prospects of winning a Big 10 athletic scholarship, Ishbia was nevertheless invited in his senior year of high school to work out with the Michigan State Spartans. The coaches noticed his unusual determination and offered him a non-scholarship membership on the team, a so-called “walk on.”
He practiced hard for four seasons, played scattered minutes in games that were already decided, providing first-string players a rest. Yet he also participated in all four of State’s “Final Four” NCAA appearances — with rings to show for it — including the National Championship in 2000.
“At first, Coach Izzo didn’t really pay that much attention to me,’’ Ishbia told the Oakland Press in 2010. The apparent lack of attention “taught me about what it means to work hard for something. He was personally responsible for putting me in that unbelievable situation. I mean, I had to bust my tail just to be the worst player on the team. I think he appreciated that.”
Striving to be a superlative bench-warmer imparted lifelong lessons. Coach Izzo “held me accountable to being the best version of myself.” Izzo didn’t expect Ishbia to dunk the ball after grabbing a rebound: “But if the ball is on the floor, I’m capable of diving for it.”
The head coach’s command of detail impressed him. “He’s deeply in the weeds of his business,” Ishbia said. “There’s nothing too small for Tom Izzo at Michigan State basketball, not even where the food is laid out for the kids to eat during recruiting visits.”
Strong Work Ethic
With a degree from MSU’s business school, the overachieving third-string point guard morphed over two decades into a feisty 41-year-old chairman and chief executive. The Bloomberg news service estimates his personal fortune at $9.42 billion, ranking him as the world’s 244th richest person. Yet he still credits Spartan basketball coach Tom Izzo, along with his father, lawyer Jeff Ishbia, as the mentors most responsible for his position today.
“My father always worked extremely hard when I was a kid,” he said. “He used to come and coach my games and then go back to the office, because there weren’t computers in those days. Like Izzo, he showed me that the guy who works the hardest has the best chance.”
One of his first athletic accomplishments was Ishbia’s selection for Detroit’s youth Maccabi team at the age of 13. The Detroit Jewish News named him as the Jewish Athlete of the Year as a senior in high school.
These days, Ishbia hasn’t much time for basketball. He arrives at the headquarters of his company, United Wholesale Mortgage (UWM), in Pontiac by 4 or 4:30 a.m.; he remains at the office, he said, until 6 or 6:30 p.m.
“I’m competing with Rocket Mortgage, Dan Gilbert, Jamie Dimon from Chase, Bank of America, Wells Fargo, these big guys,” he said. “We didn’t have as much money as them. We didn’t have as much access to things, but we have all 24 hours in a day, and if I can outwork them every day, I’m going to end up ahead. That’s what I’ve been doing for 18 years now, coming in and working three extra hours a day more than them. That adds up to a lot of hours of overtime.”
Move to Pontiac
Ishbia acknowledges great affection for Metro Detroit and welcomes the responsibility of deploying his wealth on behalf of the community, especially where the need is greatest. Finding UWM’s former headquarters in Troy “landlocked” and not able to expand, Ishbia chose Pontiac in 2018 “as a place we could grow into and make a positive impact.” In November, UWM paid $23.3 million to buy the 15.8-acre onetime Ultimate Soccer sports complex, part of which will be converted to workspace and the rest for youth sports activities.
“I love Pontiac,” Ishbia said of the city, which has been one of Michigan’s most economically troubled. “My mother was a teacher in Pontiac for 25 years. I played basketball there. We’ll do some cool things with the sports center. We’re bringing activity to the city. I’ll do a school, a community center. But our biggest impact will be to run a really great business.” He noted that UWM hired 1,500 new employees since January.
Among his philanthropic activities was a $32 million donation in February to — surprise! — Michigan State athletics. The money will be used to upgrade football facilities and will include the renaming of the Breslin basketball arena for Tom Izzo.
Like Bill Gates, Warren Buffett and many other billionaires, Ishbia knows that great riches come with societal expectations. “I’m newer to the game of making an impact,” said the single father of three children. “The things that are most core to me are kids, making an impact on children, and at the same time homelessness and people who are hungry.”
The pandemic hasn’t slowed UWM’s growth. While some employers point to a future mix of in-home and in-office work, Ishbia prefers keeping his team together as much as possible. When directives from the state and safety precautions permit, Ishbia says employees who had been working from home will be returning. “Hey, we’ve got to follow the governor’s orders,” he said. “Most of the team is asking, begging to come back.”
Today, as the chief executive officer of UWM Holdings Corp. (ticker symbol UWMC), Ishbia is locked in a high-profile competition for top spot as the nation’s top mortgage lender. The current No. 1 is Detroit-based Rocket Companies Inc., also known as Quicken Loans, headed by Dan Gilbert, another Jewish kid from the suburbs who attended Michigan State.
In January, UWM emerged as a $16 billion publicly traded corporation via a merger with a SPAC — special purpose acquisition company — controlled by Alec Gores, brother of Detroit Piston owner Tom Gores. The innovative technique for converting companies to public ownership lately has seized the stock market’s imagination. It’s a financing method in which investors first buy shares of a so-called “blank check” company that afterward acquires its target — in this case, United Wholesale Mortgage — the renamed company subsequently trading under the target’s name.
UWM and Rocket (ticker symbol RKT), both originate home loans, though their approach is different. Rocket, roughly three times the size of UWMC in terms of market capitalization, specializes in retail lending directly to those buying or refinancing a house; UWM focuses on mortgage brokers, who shop for mortgages on behalf of homebuyers.
“Now, things are a little more center stage because we’re Numbers 1 and 2,” Ishbia said. Back in the day “they [Rocket] were No. 10 and we were No. 30, in terms of loan originations.”
As a relative newcomer to media scrutiny, the stock market and the responsibilities of being a billionaire, Ishbia appears to be enjoying himself and settling in comfortably. He likely isn’t finished with athletics, though. When I asked him if he wouldn’t like to one day own a sports franchise, he replied: “I’m very blessed and lucky to have the means to be able to buy a sports team, which is always a dream. I wasn’t good enough to play for one, so maybe I should own one, right? One day will I look at doing that? Absolutely, I will.Apple-converted-space”>
“Basketball is obviously my passion, so that’d be my first one, but I love all sports.”Apple-converted-space”>