- Just hours after making its public debut on Thursday, mortgage lender Better.com experienced a major drop in its share price, plunging as much as 95%.
- This comes two years after a tumultuous period that included CEO Vishal Garg’s abrupt layoff of hundreds of employees via Zoom.
- Shares plummeted immediately at the opening bell, falling so rapidly that trading was halted four times in the first 30 minutes, before plunging more than 90%.
The shares of Better.com, whose CEO is famous laid off 900 employers a brutal Zoom call two years ago – dropped as much as 95 percent on its first day of trading, suffering spectacularly after losing a staggering amount One billion dollars in just over two years.
Just hours after making its public debut on Thursday, mortgage lender Better.com saw its share price plummet, following a tumultuous period that included the abrupt layoff of hundreds of employees via Zoom by the government. CEO Vishal Garg.
Shares plummeted immediately at the opening bell, falling so rapidly that trading was halted four times in the first 30 minutes. By Friday morning, the value of shares in Better Home & Finance, or Better.com, had plunged more than 95 percent.
Given his optimism earlier in the day, Garg probably didn’t foresee his company’s stock plummeting spontaneously and so dramatically.
“This is a time for celebration,” he announced, after the merger with Aurora Acquisition Corp. was completed.
“We are proud to take a big step to expand our ability to innovate the homeownership process by becoming a publicly traded company,” he said, according to Fortune.
Following its merger with Aurora Acquisition Corp., the combined entity is now known as Better Home & Finance Holding Company.
This deal provides approximately $565 million in fresh capital for Better.com, including a $528 million convertible note from SoftBank affiliates and additional capital from NaMa Capital, an investment firm associated with Aurora.
Garg has reportedly personally guaranteed any losses SoftBank may incur if it chooses to sell the debt. The terms of the agreement could force Garg to sell its shares of Better and potentially affect the price of the shares, according to Technological crisis.
However, despite the capital injection, Better.com faces ongoing financial challenges.
The company reported a net loss of $89.9 million in the first quarter and experienced substantial workforce reductions, cutting approximately 91 percent of its employees in a span of 18 months.
While the startup has managed to pare its losses from a net loss of $327.7 million at the start of 2022, it remains struggling due to high mortgage interest rates and a slowdown in the national housing market.
In addition, the company’s reputation has suffered considerable damage since December 2021.
The transition from a private to a public entity is particularly complicated because Better.com involves mishandled layoffs, allegations of employee mistreatment, acknowledged financial missteps, notable executive departures and other claims.
From the company’s point of view, the reverse merger with Aurora SPAC, a deal that had been in the works for more than two years, was, in fact, a life-saving move.
Before the merger, the chief executive said he had “worked very, very hard” to be “more empathetic” and treat people with “kindness.”
“So I’ve worked very, very hard to change the way I present myself to the team every day, to be more empathetic and treat them with the same level of kindness that I showed our customers,” Garg said. TechnologyCrunch.
“I think he was very mission focused, very customer focused and very, very focused on what was needed to drive growth,” Garg added.
Better.com’s disastrous debut on the Nasdaq comes after dramatic turns at the digital mortgage company since December 2021, when CEO Vishal Garg brutally fired 900 employees in a Zoom call.
He then criticized them for being so “lazy” that they were effectively “stealing” customers, accusing at least 50 of the fired employees of theft from the company for allegedly overreporting their work hours, Fortune reported at the time.
Vishal Garg laid off around nine percent of Better.com’s workforce in the brutal call just three weeks before Christmas, including his entire diversity, equity and inclusion team, which deals with complaints about racism and bullying. sexism in the workplace
Garg told them bluntly, ‘This is not news you want to hear… If you are on this call, you are part of the unfortunate group being fired. Your employment here terminates with immediate effect.’
The 43-year-old said “the market has changed” meaning savage cuts to the $7 billion company’s workforce were needed to avert disaster.
An angry worker filmed the call and shared it online, with a moment in which they cursed at the CEO as he confirmed the mass “layoff” of employees at the Manhattan-based mortgage provider.
The unidentified worker could be heard saying: ‘Fuck you, dude.’ Are you kidding?
Garg, who has been accused of being “erratic” by workers, then doubled down in a scathing blog post in which he lashed out at his staff for “stealing” out of laziness.
The father of three wrote on the Blind career network: ‘Did you know that at least 250 of the people laid off were working an average of 2 hours a day while working more than 8 hours a day in the payroll system?’
‘They were robbing you and our bill-paying customers who pay our bills. Find out,” he added.
Speaking to Fortune, Garg, who once threatened to staple a former business associate to a wall and burn him alive, according to court documents, confirmed that he had made the comments under the anonymous username “uneducated” but declined to comment. reverse.
“I think they could have been phrased differently, but honestly the feeling is there,” he said.
In January 2022, it was announced that the CEO would resume his “full-time duties” after taking “some time off to reflect on his leadership” in December.
In a letter sent to employees at the time, he Announced that he would return after spending time considering ‘the leader he wanted to be’.
‘I understand how difficult these last few weeks have been. I am deeply sorry for the anguish, distraction and embarrassment my actions have caused,” she wrote in the email.
“I’ve spent a lot of time thinking about where we are as a company and the kind of leadership Better needs…and the leader I want to be.”