Rocket Mortgage’s $1.75B Redfin Deal: Genius Long-Term Play or Overpriced Gamble?

Thoughts on a favorite interest rate meme play ... have they evolved?

Rocket’s Big Swing: The Redfin Acquisition and What It Means

It’s March, and you’re at dinner listening to your boomer uncle swirl his Merlot, telling you how rates were supposed to go down this year and how he loaded up on TLT to ride the great bond rally. TLT is up 5%. Nice work. But then, he logs into Fidelity and stumbles onto some Reddit post from MortgageMax42069 bragging about how he was up 40% on Rocket Mortgage (RKT)… before it sold off. And yes to my friends, the scoreboard still says RKT up 23% YTD and TLT up 4% YTD. Uncle Boomer scratches his head. A mortgage company? Up big? Then down just as fast? And now they’re buying Redfin? He doesn’t get it. But you will now.

The Deal: Rocket Buys Redfin

Rocket Mortgage just announced a $1.75 billion all-stock acquisition of Redfin, giving Redfin shareholders 0.7926 shares of RKT per RDFN share - a 63% premium to where Redfin was trading. The deal is expected to close in mid-2025, and Redfin CEO Glenn Kelman will stick around to run Redfin inside Rocket. No debt, no big cash burn - just a straight-up equity deal. And they’re using it to simplify Rocket’s own capital structure, collapsing its dual-class stock into a single-vote structure, cleaning up governance for future moves. A smart move most won’t notice.

“By integrating Redfin’s real estate expertise and customer traffic with Rocket’s financial and technology platform, we are creating the most comprehensive homebuying and financing experience available,” said Varun Krishna, CEO of Rocket Companies.

But let’s talk about why they did it.

My $0.02 on the Deal