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Shares of Better.com – whose CEO fired 900 employers following a harsh Zoom call two years ago – fell 95% on day one of trading, suffering dramatically after a staggering loss . $1 billion in just over two years.
Just hours after making its public debut on Thursday, mortgage lender Better.com saw a major drop in its share price, following a tumultuous period that included the abrupt layoff of hundreds of employees via Zoom by CEO Vishal Garg.
The shares plunged immediately upon opening, so rapidly that trading was halted four times in the first 30 minutes. As of Friday morning, the value of shares of Better Home & Finance, or Better.com, had fallen more than 95 percent.
Given his optimism at the start of the day, it’s likely that Garg hadn’t anticipated that his company’s stock would spontaneously fall so dramatically.
“It’s time to celebrate,” he announced after completing the merger with Aurora Acquisition Corp.
Shares of Better.com – whose CEO fired 900 employers following a harsh Zoom call two years ago – fell 95% on day one of trading, suffering spectacular pain as the mortgage lender loses 1 billion dollars in just two years.
As of Friday morning, the value of shares of Better Home & Finance, or Better.com, had fallen more than 95 percent. The shares plunged immediately upon opening, so rapidly that trading was halted four times in the first 30 minutes.
“We are proud to take an important step in expanding 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.
The deal brings in approximately $565 million in new capital to Better.com, including a $528 million convertible note from SoftBank affiliates and additional equity from NaMa Capital, an Aurora-associated investment firm.
Garg would have personally guaranteed any losses SoftBank might incur if it chose to sell the debt. The terms of the deal could potentially force Garg to sell his Better shares and potentially impact the stock price, according to Technological crunch.
However, despite the capital injection, Better.com faces persistent financial challenges.
The company posted a net loss of $89.9 million in the first quarter and suffered significant workforce reductions, shedding about 91% of its workforce over an 18-month period.
Although the startup managed to trim its loss from a net loss of $327.7 million at the start of 2022, it remains struggling due to high mortgage interest rates and a slowing national real estate 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 tricky due to Better.com’s mishandled layoffs, allegations of employee mistreatment, acknowledged financial missteps, notable executive departures, and other claims. .
From the company’s perspective, the reverse merger with Aurora SPAC – a deal that has 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 very, very hard” to be “more empathetic” and to treat people with “kindness”.
Given his optimism earlier in the day, it’s likely Garg hadn’t expected his company’s shares to spontaneously fall so dramatically.
“So I’ve worked very, very hard to change the way I present myself to the team every day, to be more empathetic and to treat them with the same level of kindness that I’ve shown our customers,” said Garg. TechCrunch.
“I think I was very mission-focused, customer-focused and really, really focused on what it took to drive growth,” Garg added.
Better.com’s disastrous Nasdaq debut comes after dramatic turns for the digital mortgage company since December 2021, when CEO Vishal Garg abruptly fired 900 employees during a Zoom call.
He then blamed them for being so ‘lazy’ that they actually ‘stole’ clients – accusing at least 50 of the company’s laid-off employees of theft for allegedly over-reporting their working hours, Fortune had reported. at the time.
Vishal Garg fired around nine per cent of Better.com’s workforce in a brutal call just three weeks before Christmas, including his entire diversity, equity and inclusion team, which handles complaints about racism and sexism in the workplace.
Garg told them bluntly, “This isn’t news you want to hear…If you answer this call, you’re part of the unlucky group that’s being fired.” Your employment here ends with immediate effect.
The 43-year-old said “the market has changed”, meaning drastic reductions in the company’s workforce of $7 billion were needed to avert disaster.
An angry employee filmed the call and shared it online, complete with a moment of them swearing at the CEO as he confirmed the mass ‘firing’ of employees at the Manhattan-headquartered mortgage provider.
From the company’s perspective, the reverse merger with Aurora SPAC – a deal that has 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 very, very hard” to be “more empathetic” and to treat people with “kindness”.
Better.com’s disastrous debut comes after dramatic turns for the digital mortgage company since December 2021, when CEO Vishal Garg abruptly fired 900 employees during a Zoom call.
The unidentified worker could be heard saying, “Fuck you man.” Are you fucking kidding me?’
Garg, who has been accused of being ‘erratic’ by workers, then doubled down in a scathing blog post that saw him accusing his staff of ‘stealing’ out of laziness.
The father-of-three wrote on professional network Blind: “You know that at least 250 of the people laid off were working an average of 2 hours a day despite clocking in more than 8 hours a day in the payroll system?”
“They were robbing you and robbing our customers who pay the bills who pay our bills. Educate yourself,” 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 made the comments under the anonymous username “uneducated”, but refused to back down.
“I think they could have been worded differently, but honestly the feeling is there,” he said.
In January 2022, it was announced that the CEO would return to “full-time duties” after taking “a leave of absence 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 thinking about “the leader I wanted to be”.
“I understand how difficult the past few weeks have been. I am deeply sorry for the anguish, distraction and embarrassment my actions have caused,” he wrote in the email.
“I spent a lot of time thinking about where our business is now and what kind of leadership Better needs…and the leader I want to be.”
Better.com CEO Vishal Garg who fired 900 workers in infamous Zoom call sees stock crash