Shares of Better — whose CEO fired 900 workers on a Zoom call — slumped 93% on their first day of trade
- Shares of online mortgage lender Better slumped 93%
- The shares plunged at the opening bell. They fell so quickly that trading was halted four times in the first 30 minutes.
Better had an awful debut on the Nasdaq on Thursday. Better Home & Finance — a newly formed mortgage origination company following a SPAC combination with Aurora Acquisition Corp. — plummeted 93% in its first day of trading.
Shares fell so quickly that trading was halted four times in the first 30 minutes, Insider's Alex Nicoll reported on Thursday.
The day before the offering, Aurora closed at $17.44, valuing Better at $14 billion. The share price of the new entity then quickly plummeted in its Aug. 24 debut to as low as 77 cents before closing at $1.15 for a valuation of just above $1 billion.
The decline comes with two caveats: First, the company's shares outstanding surged from 9 million pre-merger to 802 million, which heavily diluted the stock price. Second, the company had a small number of shares available to the public after 95% of Aurora holders redeemed theirs by selling back to the company — something that can cause volatility in early trading.
Better grew massively during the COVID-19 pandemic thanks to the hot housing market and low interest rates. But it posted a net first-quarter loss of $89.9 million in July due to falling demand for mortgages on the back of soaring interest rates.
Those issues ran alongside dramatic turns at the digital mortgage company since December 2021 when CEO Vishal Garg brutally laid off 900 employees on a Zoom call.
He also accused at least 250 of the laid-off staffers of stealing from the company over-reporting their working hours, Fortune reported at the time.
News of Garg's handling of the mass firing went viral, and he later apologized to the remaining employees, admitting that he had "blundered the execution" of the layoffs.
Garg seems to have emerged a different person from the episode, telling TechCrunch in an interview published Wednesday that he had since gone through "a lot" of leadership training and has "worked really, really hard" to be a kinder boss.
News of Better.com's plans to go public first broke in May 2021, but the merger with Aurora was delayed amid regulatory scrutiny and the controversial layoffs.
Despite the setback in its stock price on its trading debut, Better said it is taking a long-term view of its business.
"We're focused on building a multi-generational business that creates long-term value for our investors," Kevin Ryan, president and CFO of Better told Insider.
Editor's note: This story has been updated to be more precise about the name of the post-SPAC entity, and to offer more specificity around the share moves and what contributed to them.