In a significant setback for online mortgage lender Better.com (BETR), its parent company, Better Home & Finance, witnessed a staggering 90% drop in its stock value shortly after its debut on the public market.
The decline occurred following a merger with Special Purpose Acquisition Company, Aurora Acquisition Corp.
Prior to the merger, Aurora stock was priced at $17.44, but it plummeted to $1.15 upon closing on Thursday.
By Friday, it slightly improved to $1.19.
Better.com’s journey to becoming a public company faced challenges. Its IPO had been delayed due to an investigation by the Securities and Exchange Commission (SEC) into potential violations of securities laws.
However, the SEC eventually decided not to recommend enforcement action against the company.
In 2021, Better.com drew attention for dismissing 900 employees through a Zoom call. CEO Vishal Garg has been working on rebuilding trust within the team through leadership initiatives.
The drop in Better.com’s stock value reflects broader challenges in the IPO and SPAC markets. Companies like WeWork (WE), Arrival (ARVL), and Virgin Galactic (SPCE) have also experienced substantial losses after going public via SPACs.
Factors contributing to these declines include a more challenging economic environment, stricter SEC regulations, and changing market dynamics.
SPAC IPOs surged in early 2021, but the landscape has shifted with only four SPACs going public in the second quarter of 2023.
While some experts highlight the need for quality companies in the SPAC space, the overall sentiment toward SPACs has become cautious due to evolving market conditions and regulatory scrutiny.
(Source: Yahoo Finance)
