Hunterbrook Media Shorts United Wholesale Mortgage: UWM Casts Doubt On New Firm's Integrity
Hunterbrook Media, a new hedge fund that doubles as a news organization, released its first short report on UWM Holdings Corp (NYSE:UWMC) on Tuesday. Hunterbrook alleges in the report that UWM unfairly incentivized mortgage brokers to push business to the firm — and Hunterbrook encouraged a class action lawsuit against UWM, the country's largest mortgage lender.
What Is Hunterbrook Media? Hunterbrook is a hybrid between a hedge fund and a news organization founded by two Harvard graduates, Nathaniel Brooks Horwitz and Sam Koppelman. Hunterbrook's first report, which outlines what it said are unfair and deceptive practices from UWM, discloses the fact that Hunterbrook took a short position out on UWM and a long position on its biggest competitor, Rocket Companies Inc (NYSE:RKT).
The Short Report: Hunterbrook said in the report that UWM misled its customers by saying that independent brokers shop around to find the best deal for homebuyers and end up going to UWM because UWM can offer the best prices. In reality, these “independent brokers” push more than 99% of their business to UWM, the report said.
UWM responded to the report, questioning Hunterbrook's journalistic practices and the validity of the report.
"Hunterbrook is not a news organization. It is a hedge fund sensationalizing public information to manipulate the stock market to enrich themselves and their investors," UWM said in a statement.
"Buried deep in their ‘report,’ and prior to its publication, Hunterbrook ‘went short $UWMC, long $RKT and purchased derivatives.' As you would expect a hedge fund masquerading as journalism would knowingly mislead the public, the report itself is riddled with inaccuracies and incorrect information,” UWM’s statement said.
“A hedge fund scheme using journalists to short a stock is not only unethical, it may be fraudulent."
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UWMC Price Action: UWM shares gained 1.67% Wednesday, closing at $6.10.
Mortgage illustration by Jens Neumann from Pixabay.