Mortgage lender Better's shares sink in grim Nasdaq debut
mortgage lender, which went public via a blank-check company merger just as mortgage rates have hit two-decade highs.
Backed by SoftBank, Better completed its combination with special purpose acquisition company (SPAC) Aurora Acquisition Corp, capping a rocky deal that was first announced in 2021 but delayed amid regulatory scrutiny and layoffs at Better.
The company hit the headlines in December 2021 after it laid off 900 employees via Zoom, and has since seen its profits dented as high mortgage rates have dampened demand for home loans.
Aurora went public in March 2021. Shares in Better Home & Finance Holding Co, the newly merged entity, finished the session down 93.4% at $1.15.
SPACs are shell companies that raise funds through a public listing with the goal of acquiring a private company and taking it public.
Investors in the SPAC typically have the option to redeem their shares before the merger.
In Better's case, 95% of Aurora shareholders redeemed their shares, leaving the SPAC's trust account with roughly $24 million at the end of June from about $283 million at the end of last year, filings show. Typically, a small amount of publicly available shares makes a stock prone to volatility.
The company did not immediately respond to a request for comment on the share price move.
The completion of Better's merger with Aurora will provide the mortgage lender with an infusion of $550 million from SoftBank, which it will use to expand its mortgage product offerings, CEO Vishal Garg told Reuters in an interview earlier this week.
Better enjoyed huge growth during the onset of the COVID-19 pandemic when mortgage rates cratered, notching more than $850 million in revenue in 2020, filings show.
