SPAC to vote on Better.com's arduous journey to IPO

Better.com's exhausting, two-year odyssey to go public is finally approaching its conclusion.

Shareholders of Aurora Acquisition Corp., the special purpose acquisition company set to merge with Better, will vote on the business combination Aug. 11, it said in a financial filing. The SPAC has shown unwavering public support for the embattled lender beset by negative media coverage over mass layoffs, poor earnings and employee lawsuits.

"After careful consideration, the board of directors of Aurora has unanimously approved the Business Combination and unanimously recommends that shareholders vote "FOR" the adoption of the Merger Agreement," it said in a Monday filing with the Securities and Exchange Commission. 

A representative for Better declined to comment Wednesday. The company first announced the proposed merger in May 2021, and has since postponed its deadline. The meeting will take place at a law office in New York City and be livestreamed. 

If Better's potential initial public offering is realized, it would be a rare moment for the industry that has fallen on hard times. The low-interest rate, pandemic-era boom allowed many lenders to go public in 2020 and 2021, but many of those new Wall Street players have since faltered. Home Point Financial, which went public in 2021, sold off its mortgage operations, leaving its majority private equity shareholder to clean up its holdings. 

Better, still a private company, has reported its quarterly and annual earnings through Aurora's SEC filings and has revealed some of the largest losses by a lender in the past two years. The company posted an $889 million loss in 2022, following a $303.8 million loss in 2021. 

Amid a landscape of massive layoffs, Better may have endured the worst payroll cuts. The firm ended 2022 with 1,300 team members, with 700 based outside of the U.S. The team is a dramatic downsizing from the company's peak of 10,400 employees in 2020, before CEO Vishal Garg's ill-fated Zoom layoff set off a series of mass terminations.

Better also remains under fire from terminated employees, including the firm's former second-in-command, who are suing the lender in federal court. Lawsuits accusing Better of misleading investors and of violating the Family Medical Leave Act in layoffs remain pending. 

Aurora also said it continues to cooperate with an SEC probe over the investor accusations. 

Tuesday's filing showed no surprises in the company's proposed executive leadership, with Garg ready to take the title of CEO and director. The company's non-employee directors includes Harit Talwar, Better's non-executive chairman who previously led the creation of Goldman Sachs' consumer lending product Marcus. 

Investors swooned at the news of the upcoming vote, sending the SPAC's shares up to $36.70 Tuesday afternoon before falling to $27.35 a share as of midday Wednesday. The company's stock in the year prior had hovered around $10 per share as its merger remained uncertain. 

Update
This story has been updated with a response from a Better.com representative.
July 26, 2023 4:05 PM EDT
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