Online mortgage lender Better sees stock implode after SPAC merger

By Emily BaryCiara Linnane

Better's stock fell 93% Thursday on their first day of trading as a public company

Shares of mortgage lender Better Home & Finance Holding Co. fell flat in the company's public debut, falling 93% Thursday on their first day of trading since the completion of Better's merger with a special-purpose acquisition company.

The company announced Wednesday that its previously disclosed merger with Aurora Acquisition Corp. had been completed. The stock (BETR) is now trading on Nasdaq under the ticker 'BETR.'

The combination afforded Better access to $565 million in new capital. That includes a $528 million convertible note that was committed by SoftBank , as well as additional equity from funds affiliated with NaMa Capital, which was formerly named Novator Capital.

For more, read:Online mortgage lender Better.com goes public amid weak demand for home-buying

Chief Executive Vishal Garg told MarketWatch previously that the New York-based company was "going to come out of this abyss in the mortgage market stronger and faster than anyone else and well-capitalized."

The listing comes two years after the company initially filed to go public but was beset with issues such as lackluster earnings and controversial layoffs.

Better has more than $100 billion in funded loans, according to a press release issued on Wednesday. The company has invested heavily in technology to make the mortgage borrowing process easier.

Its One Day Mortgage product allows customers to go online, get pre-approved, lock in an interest rate and get a binding mortgage commitment letter within a 24-hour period. The company has also invested in its Tinman proprietary loan origination platform.

Garg said he plans to further expand the company's product offerings and to invest in machine learning and AI models, as well as potential acquisitions.

Garg made headlines in 2021 when he famously laid off 900 employees on Zoom. The reaction to the firings provoked criticism from across the internet, and Garg took a break to reflect on his leadership.

-Emily Bary

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08-24-23 1427ET

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