SoftBank-backed Better's shares tank 95% in disastrous NASDAQ debut
What's the story
Better.com's (Better Home & Finance Holding) shares took a significant hit on their NASDAQ debut, plunging as much as 95%.
Trading was stopped four times in the initial 30 minutes as shares fell very quickly. The company had grabbed headlines when it fired 900 employees via a Zoom call in 2021.
Despite the setback, the merger's completion has provided Better with a $550 million cash infusion from SoftBank.
Details
The merger with SPAC was delayed due to regulatory scrutiny
Better merged with black cheque company Aurora Acquisition Corp. to become a listed firm. The merger, which was announced in 2021, was delayed due to regulatory scrutiny and layoffs.
It faced regulatory challenges, including scrutiny from the Securities and Exchange Commission (SEC) regarding CEO Vishal Garg's business transactions and allegations of misleading statements.
The SEC recently concluded its probe without recommending enforcement action, allowing the deal to close.
What's next
Better expects mortgage rates to fall next year
Better has been struggling due to high mortgage rates in the US. Last week, the popular 30-year fixed rate reached its highest since 2000.
However, Better expects this to change next year. It is anticipating a boom in refinancing demand when the Federal Reserve starts cutting interest rates.
A fall in interest rates would lead to a decline in Treasury bond yields and mortgage rates.