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Late in 2021, a real estate technology startup inadvertently shone a light on a problem with remote work culture. Better.com (NASDAQ:BETR) has been disrupting the home funding and mortgage spaces through its digital-first business model. But on Dec. 6, 2021, news broke that founder and CEO Vishal Garg had deployed a highly controversial measure when he laid off 900 employees via a video conference call. This decision proved quite controversial, leading to significant criticism for Garg and the company across social media. However, less than two years later, Better has bounced back in a big enough way that its leaders believe it makes sense to go public. Today, BETR stock begins trading on the Nasdaq.
This represents a major step forward for a company that rose to many people’s radars for less than positive reasons. Now it will have the opportunity to start a new chapter. As The Observer reports:
“According to earlier Aurora filings reported by HousingWire, Better lost $90 million in the first quarter this year and had slashed more than 90 percent of its workforce in the past 18 months. The direct listing will bring in at least $550 million in new funding from SoftBank, an existing investor, with the possibility of $200 million more, according to Aurora’s filing with the SEC in July.”
What else do investors need to know about this market newcomer as Better.com begins its journey as a publicly traded company? Let’s take a closer look at this controversial innovator.
BETR Stock: What Investors Need to Know
- Better.com is going public through a reverse merger with Aurora Acquisition Corp. The companies had delayed voting on the proposal, though, due to high volatility in the special purpose acquisition company (SPAC) market.
- The newly combined company will be known as Better Home & Finance Holding Company moving forward. According to TechCrunch, the successful merger means a $565 million capital influx for Better.
- Better will have the opportunity to raise even more cash through the process of issuing convertible bonds for its backer SoftBank (OTCMKTS:SFTBY). The Financial Times reports that “Garg has personally guaranteed any losses the Japanese conglomerate may suffer if it chooses to sell the debt.”
- Since the company posted a net loss of almost $90 million during Q1 2023, it could certainly use the capital. While this is an improvement from the $327.7 million it reported one year earlier, it is hardly an encouraging statistic. Additionally, the prospect of a housing market crash could further impact its growth prospects as it begins trading.
- Some of the company’s leaders disapproved of Garg’s layoff tactic. Three high-level executives resigned in the weeks following the notorious Zoom call.
- Garg recently told TechCrunch that he has gone through extension leadership training since the 2021 layoffs. “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 states.
- The CEO also notes that his company plans on investing in technology that creates a more efficient process for customers. This could mean that BETR stock may offer investors exposure to the artificial intelligence ( ) market in the near future.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Article printed from InvestorPlace Media, https://investorplace.com/2023/08/betr-stock-alert-7-things-to-know-as-better-home-starts-trading-today/.
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