- Just hours after making its public debut Thursday, mortgage lender Better.com experienced a major drop in its share prices – slumping as much as 95%
- This comes two years after a tumultuous period that included the abrupt firing of hundreds of employees via Zoom by CEO Vishal Garg
- Shares plunged immediately at the opening bell, falling so quickly that trading was halted four times in the first 30 minutes, before plunging over 90%
Shares of Better.com – whose CEO famously fired 900 employers over a brutal Zoom call two years ago – slumped as much as 95 percent on its first day of trade, suffering spectacularly after losing a staggering $1 billion in just over two years.
Just hours after making its public debut Thursday, mortgage lender Better.com experienced a major drop in its share prices, following a tumultuous period that included the abrupt firing of hundreds of employees via Zoom by CEO Vishal Garg.
Shares plunged immediately at the opening bell, falling so quickly that trading was halted four times in the first 30 minutes. By Friday morning, the value of Better Home & Finance, or Better.com, shares had plummeted by over 95 percent.
Considering his optimism earlier in the day, it’s likely Garg didn’t foresee his company’s stock spontaneously plummeting so dramatically.
‘This is a time for celebration,’ he announced, after completing the merger with Aurora Acquisition Corp.
‘We’re proud to take a huge step in expanding our capacity to innovate the homeownership process by becoming a publicly listed 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 brings in approximately $565M in fresh capital for Better.com, including a $528M convertible note from SoftBank affiliates and additional equity from NaMa Capital, an investment firm associated with Aurora.
Garg has reportedly personally guaranteed any losses SoftBank might incur if it opts to sell the debt. The terms of the agreement could potentially force Garg to sell his Better shares and potentially impacting the stock price, according to Tech Crunch.
However, despite the infusion of capital, Better.com faces ongoing financial challenges.
The company reported a net loss of $89.9M in the first quarter and underwent substantial workforce reductions, cutting approximately 91 percent of its employees over an 18-month span.
While the startup has managed to decrease its loss compared to the $327.7 million net loss at the start of 2022, it remains in a struggle due to high mortgage interest rates and a slowdown in the national housing market.
Moreover, the company’s reputation has suffered considerable harm since December 2021.
The transition from a private entity to a public one is particularly tricky due to Better.com’s involving mishandled layoffs, allegations of mistreatment towards employees, acknowledged financial missteps, notable executive departures, and other claims.
From the company’s standpoint, the reverse merger with Aurora SPAC – a deal that had been in the works for over two years – was, in fact, a life-saving move.
Before the merger, the CEO said he’s ‘worked really, really hard’ to be ‘more empathetic’ and to treat people with ‘kindness.’
‘So I’ve worked really, really hard to change the way that I show up to the team every day, and to be more empathetic and to treat them with the same level of kindness that I showed our customers,’ Garg told TechCrunch.
‘I think I was very mission-centric, customer centric, and really, really focused on what it took 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 laid off 900 employees on a Zoom call.
He then slammed them for being so ‘lazy’ they effectively ‘stole’ from customers – accusing at least 50 of the laid-off staffers of company theft over allegedly over-reporting their working hours, Fortune reported at the time.
Vishal Garg axed around nine per cent of Better.com’s workforce in the brutal call just three weeks before Christmas – including its entire diversity, equity and inclusion team, which deals with complaints about racism and sexism in the workplace.
Garg told them bluntly: ‘This isn’t news that you’re going to want to hear…If you’re on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately.’
The 43-year-old said that the ‘market has changed’ meaning savage cuts to the $7 billion company’s workforce were needed to avert disaster.
One angry worker filmed the call and shared it online, complete with a moment where they cursed at the CEO as he confirmed the mass ‘termination’ of employees from the Manhattan-headquartered mortgage provider.
The unidentified male worker could be heard to say ‘F**k you dude. Are you f**king kidding me?’
Garg, who has been accused of being ‘erratic’ by workers, later doubled-down in a scathing blog post which saw him lay into his staff for ‘stealing’ through laziness.
The father-of-three wrote on professional network Blind: ‘You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system?’
‘They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated,’ he added.
Speaking to Fortune, Garg – who once threatened to staple a former business partner to a wall and burn him alive, according to court documents – confirmed he had made the comments under the anonymous username ‘uneducated’, but refused to back down.
‘I think they could have been phrased differently, but honestly the sentiment is there,’ he said.
In January 2022, it was announced that the CEO would resume his ‘full-time duties’ after taking ‘time off to reflect on his leadership,’ in December.
In a letter sent to employees at the time, he announced that he would be returning after time spent considering ‘the leader I wanted to be.’
‘I understand how hard these past few weeks have been. I am deeply sorry for the angst, distraction and embarrassment my actions have caused,’ he wrote in the email.
‘I’ve spent a lot of time thinking about where we are as a company and the type of leadership Better needs…and the leader I want to be.’