Mat Ishbia pledged more than half of mortgage giant UWM Holdings Corp.’s outstanding shares to secure loans before buying the Phoenix Suns for a record $4 billion.
Ishbia holds his stake through SFS Holding Corp., which owns 94% of UWM’s outstanding stock and pledged the shares, according to the firm’s 2023 proxy statement.
Ishbia is worth $5.5 billion and his fortune dropped by $3.4 billion after the pledged shares were removed from his net worth calculation.
Executives of publicly traded companies will often pledge shares as collateral, but it is unusual for more than half of their shares to be tied up as collateral. If the share price goes down, lenders can request additional collateral or for the loan to be repaid.
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