Share price of Better crashes 93% on first day of trading

The CEO of a company who once fired 900 workers on Zoom has seen the stock price of his firm disintegrate before his eyes after it went public.

The CEO of a company who once made headlines for firing 900 workers on Zoom has watched the firm’s market capitalisation disintegrate before his eyes.

Vishal Garg is the CEO of US-based Better, an online mortgage lender. His awkward mass-firing of workers in December 2021 was widely reported.

“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,” he said at the time.

The company made its debut on the New York-based Nasdaq on Thursday after a merger with Special Purpose Acquisition Company (SPAC) Aurora Acquisition Corp in a deal which created the entity Better Home & Finance Holding Company.

SPAC is a shell company that is used to acquire a private company and make it public.

But things didn’t go to plan.

Vishal Garg, CEO of online mortgage lender Better.com.

The night before the merger Aurora was selling for $US17.44, with investors valuing Better at $US14 billion.

By the market’s close shares were selling for $US1.19 — a loss of about 93 per cent in value which left the company with a market capitalisation of around $US922 million.

The market was so volatile that trading in the shares had to be halted four times in the first 30 minutes.

Before the disastrous day, Garg had been optimistic about the deal.

“This is a time for celebration,” he had announced after the merger.

Fortune quoted the CEO as saying, “We’re proud to take a huge step in expanding our capacity to innovate the homeownership process by becoming a publicly listed company.”

He told Barron’s: “We think that we have amazing growth prospects ahead,” adding, “particularly as interest rates come back down or normalise.”

The CEO sacked all 900 employees on the Zoom call. Picture: YouTube

Better had a rocky road to going public, with a US Securities and Exchange Commission (SEC) investigation into alleged violations of securities laws ending without any enforcement action.

The company boomed during the pandemic as interest rates were slashed in the US.

But the Fed’s aggressive move that pushed rates upwards to fight inflation has been punishing for Better.

The firm reported about $US1.2 billion in losses for 2021 and 2022 and has sacked 91 per cent of its staff over the past 18 months, the Financial Times reports.

It recently warned it “may not be able to continue as an operating company” if the merger failed or if it was unable to secure more funding.

The merger was backed by Japanese giant SoftBank and Icelandic billionaire Thor Björgólfsson.

Better was reportedly planning to raise $US550 million by issuing convertible bonds to SoftBank — which Garg has personally guaranteed.

Following the Zoom controversy, Garg said he went through “a lot of leadership training”.

“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,” he told TechCrunch.