By Hannah Lang
(Reuters) – Shares in online mortgage lender Better’s new public listing plummeted on Thursday as investors fretted over record-high mortgage rates.
Better, whose stock was down 95% at 89 cents in morning Nasdaq trading, went public via a merger with blank-check company Aurora Acquisition Corp, a deal that was first announced in 2021 but delayed amid a U.S. Securities and Exchange Commission inquiry and multiple rounds of layoffs, regulatory filings show.
In the interim, roughly 95% of Aurora shareholders redeemed their holdings, leaving the trust account with just about $24 million at the end of June from about $283 million. Aurora went public in March 2021.
The deal will provide Better with an infusion of $550 million from SoftBank, which it will use to expand its mortgage product offerings in anticipation of a boom in demand for refinancings next year, when interest rates are expected to start falling, Better executives said.
“We think that this is a really great time for us to be out there, capitalized with an additional $550 million from SoftBank that will enable the company to continue to innovate and serve its customers,” CEO Vishal Garg said in an interview.
Better did not immediately respond to a request for comment on the share price move.
Better is going public as U.S. mortgage rates continue to surge, with the popular 30-year fixed rate last week hitting the highest level since December 2000, helping drive mortgage applications to a 28-year low, the Mortgage Bankers Association said on Wednesday.
(Reporting by Hannah Lang and Lance Tupper in Washington; Editing by Mark Porter and Jonathan Oatis)