Better.com's Stock Begins Trading Publicly Down More Than 93% 22
Better.com, the digital mortgage lender in the news earlier this year when its CEO fired roughly 900 workers via Zoom, picked a bad time to go public. "Shares of the Softbank-backed company plunged 93% as it began trading as BETR on the Nasdaq Thursday, falling more than $16 per share to $1.19 by mid-day," reports Fast Company. It went public via a merger with special purpose acquisition company (SPAC) Aurora Acquisition Corp. Before its merger with BETR, Aurora had a 52-week high of $62.91. From the report: The disastrous public launch comes two years after the company initially filed to go public, but it (and the real estate market) has faced a number of challenges in the time since. The outlook for homebuying is bleak, to put it mildly, for the near- to mid-term future. Mortgage rates are at their highest point since 2000 -- hitting 7.31% last week -- and showing no signs of a turnaround. Because the majority of American homeowners have mortgages at or well below 5%, they're reticent to put their homes on the market, which creates a supply shortage, even for those who are willing to accept the high rates. But Better's own history could be working against it, as well.
The company came under fire in December 2021 for laying off 900 employees via Zoom. (Some didn't know they'd been affected until they learned they were locked out of company accounts.) A few months later, it cut another 3,000 workers. One month after, that it slashed another 1,000 jobs. Eventually, the company cut 91% of its workforce over an 18-month period. That wasn't the end of the problems, though. In a leaked video of a town hall meeting following the first round of layoffs, CEO Vishal Garg was shown vacillating on the reasons, blaming everything from marketplace forces to the recently-canned employees' performance.
The company came under fire in December 2021 for laying off 900 employees via Zoom. (Some didn't know they'd been affected until they learned they were locked out of company accounts.) A few months later, it cut another 3,000 workers. One month after, that it slashed another 1,000 jobs. Eventually, the company cut 91% of its workforce over an 18-month period. That wasn't the end of the problems, though. In a leaked video of a town hall meeting following the first round of layoffs, CEO Vishal Garg was shown vacillating on the reasons, blaming everything from marketplace forces to the recently-canned employees' performance.
Oh no! (Score:5, Funny)
How horrible! Will it be alright?
Re:Oh no! (Score:4, Funny)
Okay, I'll see myself out.
there's a technical word of art in the industry (Score:2)
there's a technical word of art in the industry for this.
I think that it's "whoops!" :)
hawk
CEO of the year! (Score:2)
Re: CEO of the year! (Score:1)
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"It's a SPAC!"
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With SPACs if you really want to be a long term investor go for the warrants (but wait for the inevitable falling knife to complete), there is a lot less to lose and if the company succeeds you can then convert it to stock.
-DAMHIKT
Re:My understanding of SPACs (Score:5, Insightful)
SPACs are a train wreck for a long term investment. Unless you are swing trading with the volatility prior to the merger it is best to steer clear. Someone might point to vinfast and think it is a success - give it a year. With SPACs if you really want to be a long term investor go for the warrants (but wait for the inevitable falling knife to complete), there is a lot less to lose and if the company succeeds you can then convert it to stock. -DAMHIKT
There are SPACs that have been successful. But, they are few and far between. Draft Kings worked out primarily because the regulatory environment changed.
There is sort of the question of why the company didn't go public with a traditional IPO which would have generated more money for the company with the money raised.
For companies that are engaged in activities that have not yet been fully legalized (like cannabis) If the company is otherwise on solid ground, maybe it makes sense. But, if it is because they are unable to perform due diligence of an IPO it probably means they aren't ready to be a public company.
(Just my opinion and observations)
Re: (Score:2)
Modern businesses apparently aren't considering going public the way they did in the past. Several reasons have been cited, the availability of cheap debt means you don't need to sell chunks of your business to raise capital for expansion, experience with your outside investors forcing business decisions that are good for short term profits but terrible for long term business, "blitzscaling" where the company is barely "worth" anything so going public would be a terrible idea until they are established... a
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New ticker symbol is now WRSE instead of BETR (Score:5, Funny)
:P
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1/11 the company, 1/17th the value (Score:5, Insightful)
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An IPO requires that you live up to certain financial standards, audits, and reporting to provide investors with a clear view of your operations and profitable potential. A SPAC requires none of that. These days, if a company goes SPAC it's because it can't live up to the standards of an IPO, which means now it's usually the sign of a bad company.
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That's the first red flag. SoftBank operates either with malicious intent, or unbelievable incompetence.
The actual product and service were good (Score:5, Informative)
I did a refi with them when rates were rock bottom. They were so easy to work with. Their online app and status pages was clear and showed where I was in the process. The agent could be called or emailed at any time. Costs and options were clearly communicated and there were no surprises.
That must've been a huge sales workforce. If they keep their operational part intact, I'd use them again.
Re: (Score:2)
I did the same thing, and my experience was similar except that their actual human workforce was kind of lackluster. For the initial buy, my Better agent dropped the ball getting a "survey" done and the manager had to step in to keep the sale from falling apart. My buyer's agent was pissed. For a refi, I had my own lawyer for title work but they did it anyway without asking me. I asked them to remove that charge and they gave me kind of a runaround trying to sa
Better.com, the digital mortgage lender... (Score:2)
They need to fire that CEO (Score:2)
...he's running the place (and reputation) into the ground.