- Just hours after its public debut Thursday, mortgage lending site Better.com has seen its share price plunge — down as much as 95%.
- It comes after two years of a turbulent period that included the sudden dismissal of hundreds of employees over Zoom by CEO Vishal Garg
- Stocks fell immediately at the opening bell, dropping so quickly that trading was halted four times in the first 30 minutes, before plummeting more than 90%.
Shares of Better.com — whose CEO fired 900 employers over a brutal Zoom call two years ago — fell as much as 95 per cent on the first day of trading, and have suffered spectacularly after a stunning loss. $1 billion in just over two years.
Just hours after making its public debut on Thursday, mortgage-lending site Better.com saw its share price plunge, after a turbulent period that included the abrupt firing of hundreds of employees over Zoom by CEO Vishal Garg.
Stocks fell immediately at the opening bell, dropping so quickly that trading was halted four times in the first 30 minutes. By Friday morning, shares of Better Home & Finance, or Better.com, were down more than 95 percent.
Given his optimism earlier in the day, Garg probably didn’t expect his company’s stock to automatically drop so dramatically.
“Now is the time to celebrate,” he declared after completing the merger with Aurora Acquisition Corp.
“We are proud to have taken a major step in expanding our ability to innovate the homeownership process by becoming a publicly listed company,” he said, according to Fortune.
After merging with Aurora Acquisition Corp., the combined entity is now known as Better Home & Finance Holding Company.
This transaction brings in approximately $565 million in new capital to Better.com, including $528 million in convertible notes from SoftBank affiliates and additional shares from NaMa Capital, an Aurora-related investment firm.
Garg reportedly personally guaranteed any losses SoftBank might incur if it chose to sell the debt. The terms of the agreement could potentially force Garg to sell his preferred shares, which could affect the share price, according to technology crisis.
However, despite the capital infusion, Better.com faces ongoing financial challenges.
The company reported a net loss of $89.9 million in the first quarter and underwent significant workforce reductions, cutting nearly 91 percent of its employees over an 18-month period.
And while the startup managed to reduce its loss compared to a net loss of $327.7 million at the start of 2022, it is still grappling with rising mortgage interest rates and a slowdown in the national housing market.
Moreover, the company’s reputation has suffered significant damage since December 2021.
The transition from a private to a public entity is particularly challenging given Better.com’s mishandling of layoffs, allegations of employee abuse, admitted financial misstatements, perceived departures of executives, and other claims.
From the company’s perspective, the reverse merger with Aurora SPAC — a deal that’s been in the works for more than two years — was actually a life-saving move.
Prior to the merger, the CEO said he had “worked really hard” to be “more empathetic” and to treat people “with kindness”.
“I’ve worked really hard to change the way I appear in front of the team every day, to be more empathetic and treat them with the same level of kindness that I show our customers,” Garg said. Techcrunch.
“I think I was very focused on the mission, on the customers, and really focused on what it takes to drive growth,” Garg added.
Better.com’s disastrous Nasdaq debut follows dramatic shifts at the digital mortgage company since December 2021 when CEO Vishal Garg brutally laid off 900 employees on a Zoom call.
He then criticized them for being so “lazy” that they actually “stole” from customers — accusing at least 50 laid-off employees of stealing from the company for overreporting their hours, Fortune magazine reported at the time.
Vishal Garg fired about nine percent of Better.com’s workforce in a brutal call just three weeks before Christmas — including the entire diversity, equality and inclusion team, which deals with complaints about racism and sexism in the workplace.
“This is not news you want to hear… If you are on this call, you are part of the unlucky group that will be laid off,” Garg told them bluntly. Your employment here is terminated immediately.’
“The market has changed,” the 43-year-old said, meaning massive workforce cuts are needed at the $7 billion company to avert disaster.
An angry worker filmed the call and shared it online, with a moment in which he cursed the CEO when he confirmed the mass “termination” of employees from the Manhattan-based mortgage provider.
The unidentified operator can be heard saying “Fuck you, man”. Are you king kidding me?
Garg, who was accused by workers of being “erratic”, later doubled down on a scathing blog post which saw him attack his staff for “stealing” through laziness.
The father-of-three wrote on the Blind Career Network: “Did you guys know that at least 250 terminated people have been working an average of 2 hours per day while logging 8+ hours per day into the payroll system?”
“They have been stealing from you and stealing from our bill paying customers that pay our bills. Learn it,” he added.
Speaking to Fortune, Garg — who once threatened to pin a former business partner to a wall and burn him alive, according to court documents — confirmed he made the comments under an “uneducated” anonymous username, but refused to back down.
“I think it could have been phrased differently, but honestly the sentiment is there,” he said.
In January 2022, it was announced that the CEO would resume “full-time duties” after taking “a leave of absence to reflect on his leadership” in December.
In a letter to staff at the time, he announced that he would return after his time thinking about “the leader I wanted to be.”
“I understand how difficult the past few weeks have been. I am deeply sorry for the anxiety, distraction and embarrassment my actions have caused,” he wrote in the email.
“I’ve spent a lot of time thinking about who we are as a company and what kind of leadership and needs are best…and the leader I want to be.”
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”