Shares of Better Home & Finance crashed by 90% after the company went public following its merger with Special Purpose Acquisition Company, Aurora Acquisition Corp. Aurora’s stock was priced at $17.44 before the merger. It then tanked to a low of $1.15 before closing at $1.19.
“We struck this deal in May of 2021,” CFO Kevin Ryan explained, alluding to the long journey that online mortgage lender Better.com took to go public. “It was clearly a much better time in the mortgage market. It was a much better time for SPACs.”
Yelena Dunaevsky, a corporate finance and securities attorney and SPAC insurance adviser, claimed that the Better stock is “a dud”, categorizing it in the group of recent SPAC stocks that have plunged in recent times.
Better.com’s challenges may stem from a poor real estate market for new home purchases. On Thursday, the average 30-year mortgage rate hit a 22-year-high of 7.23%, with the Federal Reserve preparing to sustain interest rate hikes for longer in an effort to beat down inflation further.