For Better Or Worse: Two Years After Viral Firing Of Employees On Zoom, Better.com Hits New Lows In Public Debut
The executives for Better Home & Finance Holding Company (NASDAQ:BETR) have likely seen better days, but then again their former employees had too before some were fired over a Zoom call shortly before the 2021 holidays.
Here’s a look at the dramatic fall in Better Home & Finance Holding Company, also known as Better.com, which saw shares hit new lows in its first day of trading.
What Happened: Better.com announced a SPAC merger back with Aurora Acquisition Corp (NASDAQ:AURC) in May 2021 as the company was enjoying strong growth from the booming mortgage market with huge demand for housing and low-interest rates.
Months later, the company would have a viral moment that no company wants with a human resources disaster that captured the attention of the public.
Better CEO Vishal Garg hosted a call on Zoom with 900 employees to inform them that their jobs had been terminated.
“If you’re on this call, you are part of the unlucky group that is being laid off,” Garg said, as reported by CNN. “Your employment here is terminated effective immediately.”
The 900 employees made up around 9% of the company’s workforce and the call happened in early December, ahead of the Christmas and New Year’s holidays celebrated by many.
In Dec 2021, the Better, $BETR, CEO fired 900 employees on Zoom saying "I hope to be stronger next time".
— unusual_whales (@unusual_whales) August 24, 2023
The online mortgage lender went public via SPAC today, and plummeted 95%. pic.twitter.com/lKvhnXjUMp
As the video made its rounds across social media, many were disgusted with the nature of the firings happening in a group setting and over Zoom.
As shared by CNN, Garg later accused employees of “stealing” by forging hours and not being productive during work hours.
An email sent to staff that was read by Forbes showed that Garg had past controversy in the way he handled his workforce.
You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS…SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME,” Garg wrote in a previous email.
The employees who were fired and embarrassed by Better.com and Garg previously may have seen a bit of karma play out on Thursday as Better.com could become the poster child for the worst public debut of all time.
Related Link: Better.com Fires Another 3,000 Employees
Why It’s Important: An SEC investigation into Better.com in 2022 saw the request for documents from both Better and SPAC partner Aurora Acquisition over potential securities law violations. It was announced earlier this month the SEC would end its investigation. This helped clear the way for the merger to be approved earlier this month and completed this week.
Through multiple delays and shareholder votes, the float of Aurora Acquisition Corp was lowered.
The stock then became a low-float name that saw heavy trading activity and hit prices of over $60 in July and August.
Aurora Acquisition was recently flagged by Benzinga as a short squeeze candidate too, with 11.4% of the float short and a cost to borrow of 426.2%.
Shares of Aurora Acquisition closed at $17.44 on Aug. 23 before the company completed the merger and changed over to the new BETR ticker on Thursday.
On Thursday, shares of Better.com immediately tanked and saw several halts at market open. Shares of the new company crashed to $1.10 on Thursday and closed the day at $1.20.
In its market debut, Better.com saw around 90% of its valuation wiped out.
On many occasions, de-SPACs with low floats have seen their share prices shoot higher upon a market debut. In the case of Better, this happened prior to the closing with AURC shares trading significantly over the $10 level on several occasions.
Upon its market debut, Better.com unlocked new shares that were available for trading, raising its share float and potentially eliminating one of the important items that can make shares trade higher on their market debuts.
Twitter user OddDiligence pointed out that more than $200 million of Better.com shares were unlocked upon its market debut, with the shares belonging to venture capitalist investors and employees.
“Following closing, we anticipate that approximately 36% of the shares of Better Home & Finance common stock will be freely tradeable without restriction under the Securities Act and without and lock-up restrictions on transfer,” the company’s filing highlighted by OddDiligence read.
For investors the drop in share price on Thursday may have been due to the share unlock and any insiders selling, the name recognition bringing back memories of the viral Zoom call, investors seeing shares as overvalued, or a combination of all of the above.
BETR Price Action: Better.com shares were up 3.48% to $1.19 at market close Friday, gaining slightly from Thursday’s lows but still significantly below its original valuation.
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Photo: Shutterstock
