Shares in Rocket Companies Inc., the parent of the mortgage giant founded by billionaire Dan Gilbert, gained 2.6 per cent in early trading after a shrunken initial public offering that raised US$1.8 billion.

The Detroit-based company fell short of raising up to the US$3.3 billion it had aimed for. Rocket, which operates Quicken Loans and Rocket Mortgage, sold 100 million shares for US$18 each, giving the company a value of about US$35 billion. Rocket had earlier filed to sell 150 million shares at US$20 to US$22 each.

Shares were up at US$18.60 at 11:31 a.m. in New York.

The diminished listing came as investors pushed back on the company’s valuation, believing it should be priced as a consumer or financial company rather than a technology business, a person familiar with the matter said.

“We really think of ourselves as a tech platform,” Jay Farner, chief executive officer of Rocket said during an interview with Bloomberg Television on Thursday. “The growth, the scale of our platform I think is unrivaled.”

Farner added that while the company benefits from the refinancing boom caused by low interest rates, it focuses on a market of US$2 trillion a year of mortgages that includes home purchases and refinancing.

Rocket describes itself as the largest retail mortgage lender in the U.S. Gilbert, who founded Quicken Loans in 1985, will retain 79 per cent of the voting power of the company’s common stock through controlling entities, the filings show.

The IPO brings Gilbert’s net worth to about US$30 billion, more than three times the previous estimate on the Bloomberg Billionaires Index. It means for now he’s among the 40 richest people on the planet, ahead of Blackstone Group Inc.’s Stephen Schwarzman, casino magnate Sheldon Adelson and cosmetics titan Leonard Lauder. Gilbert, who was chief executive officer of Quicken Loans until 2002, is also the owner of the National Basketball Association‘s Cleveland Cavaliers.

The downsizing may signal the IPO market’s rebound is straining as the coronavirus pandemic deepens across much of the U.S. Since mid-March, only one major listing -- supermarket chain Albertsons Cos. -- had priced below a marketed range, according to data compiled by Bloomberg.

Companies have raised about US$62 billion through first-time share sales on U.S. exchanges this year, compared with US$50 billion for the same period in 2019, the data shows. That includes a record amount for so-called blank-check companies -- US$24 billion, almost double the volume for all of 2019.

Rocket’s offering was led by Goldman Sachs Group Inc., Morgan Stanley, Credit Suisse Group AG, JPMorgan Chase & Co. and Royal Bank of Canada. The shares are trading on the New York Stock Exchange under the symbol RKT.