$UWMC - Mat’s Golden Nugget

My fellow regards, I’m a guy who noticed that Intel’s accounting department is part of our community: [https://www.reddit.com/r/wallstreetbets/comments/1sz43a2/intel\_cant\_even\_align\_the\_numbers\_in\_their\_10q/](https://www.reddit.com/r/wallstreetbets/comments/1sz43a2/intel_cant_even_align_the_numbers_in_their_10q/) Today I’d like to present to you Mat’s Golden Nugget – UWMC.  Golden Nugget can mean a lot of things, both good and bad. And so is UWMC for Mat and you’ll understand why momentarily. UWMC was popular on WSB five years ago, and many things have changed since then. First, let’s discuss **WHY THE OPPORTUNITY EXISTS TODAY**. Here’s a short summary for you: “HELLO I’M MAT AND I’M RÉEEETARDED AHHHHHHHHHH https://preview.redd.it/8vsi2cu3nfah1.png?width=761&format=png&auto=webp&s=3a780a8f3241852a90b05351d02404817ba6ddf4 I LIKE WATCHING BIG SWEATY MEN PLAY EACH OTHER AHHHHHHHHHHHHHHH I NEED MONEY TO BUY THIS SHITTY NBA TEAM AHHHHHHHHHHHHH I’M A TOTAL DEGEN WHO LEVERAGED HIS OWN COMPANY AHHHHHHHHHHHHHHH AND MIGHT GET MARGIN CALLED AHHHHHHHHHHHHH The stock is down almost 80% from its 2024 high of $9.50 and is currently trading at just above $2 for the following reasons. Since IPO, the company has cumulatively earned $3 billion. https://preview.redd.it/q6bk67zymfah1.png?width=720&format=png&auto=webp&s=1f0644f69973afc674351cf026e042e634e25202 Since 2021, Mat has withdrawn $4.4 billion from the company to satisfy his wet dreams in the NBA. https://preview.redd.it/1wzulf6jnfah1.png?width=1125&format=png&auto=webp&s=b8e485578283bcd452f429f8f4dfaba04cc11da5 That’s a deficit of $1.4 billion ($4.4b - $3b = $1.4b), because he withdrew more than the company earned during that period. That’s also the main reason why total equity declined in a similar fashion ($1.6b): https://preview.redd.it/7nefeazymfah1.png?width=720&format=png&auto=webp&s=388efa6a6d87f5297af8e34c731c9f4a670f0376 In 2022, Mat had enough cash to buy the NBA team. https://preview.redd.it/jl76dw7qnfah1.png?width=1125&format=png&auto=webp&s=8ce8b1f217dcdae06b1969491f05a16777c5c454 Later, there was a rumor circulating that the Suns were out of money. In a June 2025 podcast appearance, NBA reporter Zach Harper of The Athletic said the following: https://preview.redd.it/9sslag0zmfah1.png?width=720&format=png&auto=webp&s=961a9e5ce968e3cf2ce9a50af9d26f87c8b31c98 That could be the reason Mat kept the high dividend ($0.10 a share) long after the Suns purchase date. Now, a couple of important facts. The story is that Mat pledged 805 million shares (more than half of all his stock) to JPM to buy the teams. The stock was trading at roughly $6 at that time. https://preview.redd.it/ynwng1ktnfah1.png?width=766&format=png&auto=webp&s=9afd6cb2183e184af013d2f82f411a2f1fae390a As the stock is heading down, our boy Matty is in big trouble, because he can get margin called. I don’t know what his personal financial situation is, but things could escalate very quickly. **Catalysts** Now that we’ve discussed Mat’s FAFO situation, let’s move on to the most interesting part. What’s in it for us? **1)**      TBH, I don’t know the name of this particular technical analysis pattern, so you’ll have to help me out on this one, but the **STOCK IS TRADING AT AN ALL-TIME LOW**. https://preview.redd.it/6q5ci4y4ofah1.png?width=704&format=png&auto=webp&s=47d00a7721c7ea81e54957dc7000fb68c7f05183 The support looks broken here. Gemini says that CAPITULATION is characterized by a VOLUME SPIKE, which we can clearly see from the graph below. AI Overview: >"Capitulation in the stock market presents visually as an aggressive "**volume spike**" - frequently printing **2 to 3 times the normal 50-day average trading volume** alongside a sharp, climactic price drop. This sudden, heavy volume represents a massive wave of panic-selling as exhausted investors "throw in the towel" to liquidate holdings, regardless of price." https://preview.redd.it/kdzhzezymfah1.png?width=540&format=png&auto=webp&s=07cdd52c52a0ae165111e2b5a257c5b10a1c0a27 **2)**      Second catalyst. Mat has been selling stock almost every day for years. **MAT** has recently **STOPPED SELLING THE STOCK**. Clearly the CEO thinks the stock is way too cheap below $3. The last sale transaction was on 05/07/2026 at $3.39, per OpenInsider: https://preview.redd.it/kh3sg9yjofah1.png?width=1025&format=png&auto=webp&s=07521e567ea61a44ec167b90af55e8265179f7d6 We can call Mat whatever we want, but one thing we can’t call him is stupid. Otherwise, his company wouldn’t have grown from 12 to 9,000 people: [https://imgur.com/fk3S7eV](https://imgur.com/fk3S7eV) **3)**     Current dividend at $0.10 per share are unsustainable and will have to be stopped/reduced, because the equity multiplier (leverage) doubled in the last couple of quarters. Mat funded his distributions with senior notes and cash generated from the business. **REDUCTION OF DIVIDEND SHOULD HELP THE STOCK IN THE MEDIUM TO LONG TERM**. If a Two Harbors merger happens, which is a pretty low chance, it would also help the leverage. https://preview.redd.it/tv3f0y21pfah1.png?width=751&format=png&auto=webp&s=444d6bb5ac86540ea1290cd848d4f5ef1bd62801 UWMC is bound by debt covenants, so there’s a limit on how much more money Mat can take out of the business and how much leverage he can take on. **4)      Valuation.** **A) HIGH INTEREST AND MORTGAGE RATES HELP UWMC KEEP THE VALUE OF ITS MSR PORTFOLIO STABLE.** The value of an MSR is calculated as the present value of the expected stream of servicing fees over the life of a loan. The general rule of thumb is that when interest rates go down, MSR values go down because of high prepayments and other shit. And vice versa. When interest rates go up, MSR value goes up because no one is refinancing the loans.  This trend should continue well into the rest of the year, as the new Fed chair is unlikely to cut rates due to persistent inflation. Because of this, this figure (**RED BOX**) is unlikely to drag on earnings going forward, imo: https://preview.redd.it/gimzgsiapfah1.png?width=822&format=png&auto=webp&s=267548835598696200fb00c9613a25852985a0a9 **B)** The elephant in the woodpile would be Mat’s regarded attempts to guess what rates are going to do next (see **GREEN BOX** above). This figure could weigh on next quarter’s earnings. **C) CURRENT LOAN PRODUCTION VOLUME IS** relatively **OKAY**. If we can keep loan production stable for the rest of the year, UWMC could earn $680 million on a $3.4 billion market cap in 2026 giving us a **P/E RATIO OF 4.9**. That’s my **BASE CASE**. In my **BULL CASE**, the company earns $1.2 billion on a $3.4 billion of market cap, giving us a **P/E RATIO OF 2.7**. Now, if we assume that nothing improves or Mat does something stupid and the company earns only $300 million in 2026, then the **BEAR CASE** would be a **P/E RATIO OF 11.2**, which is still not bad given the company’s position in the market. Mind you, UWMC is the largest producer of residential loans in America through the wholesale channel, with a **44% MARKET SHARE.** UWMC is so large that it originates **10% TO 12% OF ALL MORGAGES IN THE US**. And you can own this company at an 11 P/E ratio in the worst-case scenario. A no-brainer and a good Margin of Safety if you ask me. **D)** Now, as you might already know, UWMC has two classes of shares: A and D. D-shares are owned by Mat. A-shares are owned by us, serfs. However, because Mat has been selling his shares and converting them to A-shares, **OUR OWNERSHIP PERCENTAGE IS A LOT HIGHER (21%) THAN IT USED TO BE AT THE IPO (5%)**: https://preview.redd.it/b43ekavcpfah1.png?width=1125&format=png&auto=webp&s=fc99ef4118d369d72e4bf4ade7d1928d32bea7f2 So basically, we own a higher fraction of a great business, albeit a cyclical one. Warren would be proud. And the business has grown significantly over the past 5 years. When mortgage rates come down meaningfully in a year or two, the **COMPANY WILL BE MINTING CASH**. https://preview.redd.it/lpvzam5epfah1.png?width=752&format=png&auto=webp&s=50d0ce3f4b2824f7d54ae4e1118c6fadabbaead2 **5)      TWO HARBORS ACQUISITION.** I’m not going to spend a lot of time on this one, but if the merger goes through, that would be a net positive for UWMC. The purchase price is just slightly above equity book value, and the business is conservatively capitalized, which should help UWMC’s leverage situation. Two Harbors is supposed to vote on the merger matters on July 2nd. **WATCH OUT FOR THAT CATALYST ON JULY 2ND.** **6)**      And now the cherry on top. https://preview.redd.it/olm3xpwqpfah1.png?width=1125&format=png&auto=webp&s=92ef3590f602e45b8e995571172217a4e9c0c0e0 78.97% of the float is owned by institutions. Public float is roughly 339.23M shares. Per my smooth-brain calculations, if institutions own roughly 78.97% of the float, per Yahoo, that leaves **ONLY 71.3 MILLION SHARES THAT CAN BE PURCHASED BY RETAIL, or ONLY 4.5% OF ALL SHARES OUTSTANDING**. Do what you want with this information, I’m not going to comment on what can happen when too many people chase too few things too quickly. https://preview.redd.it/ctfvjhxspfah1.png?width=344&format=png&auto=webp&s=467c211cf696eed4ef8bde576204127926db32b3 https://preview.redd.it/sdd49ds7qfah1.png?width=1125&format=png&auto=webp&s=475c1d7396c49018d7d30fa8650e3411a6908ab6 7)     Mat, if you’re ever going to read this, just know that your accounting department can do better. What’s up with all those commas and zeros. Why do I have to read this shit like this: https://preview.redd.it/efab6lznrfah1.png?width=541&format=png&auto=webp&s=43b5b1761480d186b38a7c49837b704740008be2 Just remove the thousands and keep the statements in millions. Look at Frontier, how tidy and clean the numbers look. The fewer the better. https://preview.redd.it/4d5d5zflsfah1.png?width=814&format=png&auto=webp&s=6fd9936fccb7797425ea550eca839af530869f1d **POSITIONS: MISSIONARY AND DOGGYSTYLE** **IN FOR 21,000 SHARES** [https://imgur.com/BE46ZZ6](https://imgur.com/BE46ZZ6) [https://imgur.com/xPRUqVX](https://imgur.com/xPRUqVX) **TLDR: READ ONLY CAPITALIZED TEXT FOR SHORT VERSION.** I bought 21k shares. I know you prefer to buy high and sell low, but I’m giving you a chance to do the opposite for the first time in your life. Not investment advice.