Why Rocket Companies, Inc. (RKT) Crashed on Monday

We recently compiled a list of the 10 Firms Suffer Steep Downfall on Monday. In this article, we are going to take a look at where Rocket Companies, Inc. (NYSE:RKT) stands against the other stocks.

Ten companies kicked off Monday’s trading in a bloodbath, mirroring the broader market pessimism, with valuations slashed by double digits mostly due to investor caution brought about by key economic uncertainties.

Wall Street’s main indices all fell in the red, with the tech-heavy Nasdaq recording the steepest downfall with 4 percent.

The S&P 500 declined by 2.7 percent, while the Dow Jones dropped by 2.08 percent.

We have identified the 10 worst-performing companies on Monday and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion in market capitalization and $5 million in trading volume.

A businessperson using a laptop to review the details of a mortgage loan for a client.

Rocket Companies, Inc. (NYSE:RKT)

Rocket Companies, Inc. (NYSE:RKT) dived by 15.35 percent on Monday to end at $13.35 apiece, in line with the overall market decline, as investors turned cautious over its recent acquisition of real estate brokerage firm Redfin.

In a statement, Rocket Companies, Inc. (NYSE:RKT) said it had entered into an agreement with Redfin for the acquisition of its shares for $12.50 for a total of $1.75 billion.

Founded in 2004, Redfin is one of the US’s leading real estate brands, operating a top-three home search platform with more than 1 million for-sale and rental listings and a tech-powered brokerage of more than 2,200 agents.

“Rocket and Redfin have a unified vision of a better way to buy and sell homes,” said Varun Krishna, CEO of Rocket Companies. “Together, we will improve the experience by connecting traditionally disparate steps of the search and financing process with leading technology that removes friction, reduces costs, and increases value to American homebuyers.”

Overall RKT ranks 8th on our list of Monday’s worst performing stocks. While we acknowledge the potential of RKT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RKT but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.