Better Home & Finance Holding Company Announces the Completion of its Previously Announced 1-for-50 Reverse Stock Split

Rhea-AI Summary

Better Home & Finance Holding Company (NASDAQ: BETR) has completed its previously announced 1-for-50 reverse stock split. The primary goal is to increase the per share trading price of its Class A common stock to regain compliance with Nasdaq's minimum bid price requirement. The split became effective on August 16, 2024, with trading on a split-adjusted basis beginning on August 19, 2024. Key points:

• Every 50 shares were converted into one share
• Class A common stock reduced from 424,783,460 to 8,497,010 shares
• Class B common stock reduced from 259,770,986 to 5,194,080 shares
• Class C common stock reduced from 71,877,283 to 1,437,545 shares

No fractional shares were issued, and affected stockholders will receive cash proceeds from the sale of fractional shares.

Positive

• Potential to regain compliance with Nasdaq's minimum bid price requirement
• Maintained listing on Nasdaq Capital Market
• No change in stockholders' percentage interest in the company's equity (subject to fractional share effects)

Negative

• Significant reduction in the number of outstanding shares
• Potential short-term market volatility due to the reverse split
• Cash payout for fractional shares may result in minor involuntary divestment for some shareholders

Insights

Financial Analyst

The 1-for-50 reverse stock split executed by Better Home & Finance Holding Company is a strategic move to regain Nasdaq compliance. This action artificially inflates the stock price by reducing the number of outstanding shares, potentially avoiding delisting. However, it's important to note that this doesn't change the company's underlying value or market capitalization.

The reduction in outstanding shares from 424,783,460 to 8,497,010 for Class A common stock is significant. This could impact liquidity and trading volume, potentially affecting short-term price volatility. Investors should be aware that while the per-share price increases, their overall ownership percentage remains unchanged, barring fractional share adjustments.

The company's decision to consolidate shares suggests they're facing challenges meeting Nasdaq's minimum bid price requirement, which could be a red flag for the company's financial health or market perception. Investors should closely monitor upcoming financial reports and market reactions to gauge the effectiveness of this move in stabilizing the stock price and improving investor confidence.

Market Research Analyst

This reverse stock split reflects Better Home & Finance's struggle to maintain its Nasdaq listing, indicating potential market underperformance. While not directly impacting the company's fundamentals, it signals a need for increased investor scrutiny. The move could lead to short-term price volatility as the market adjusts to the new share structure.

Interestingly, the company maintained separate classes of stock (A, B and C) post-split, suggesting a complex ownership structure that could influence corporate governance and investor rights. This multi-class structure, combined with the reverse split, might affect the stock's attractiveness to institutional investors and its inclusion in certain indices.

Looking ahead, the success of this move will depend on the company's ability to leverage this 'reset' to attract new investors and improve market perception. However, without addressing underlying business challenges, the effect may be temporary, potentially leading to further corporate actions in the future.

NEW YORK--(BUSINESS WIRE)-- Better Home & Finance Holding Company (NASDAQ: BETR; BETRW) (“Better” or the “Company”), a New York-based digitally native homeownership company, today announced that on Friday, August 16, 2024, it filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”), with the Secretary of State of the State of Delaware, effecting its previously-announced 1-for-50 reverse stock split of the Company’s common stock for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Nasdaq”). The Company’s Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024, under the existing ticker symbol “BETR” with a new CUSIP number, which is 08774B508. The Company’s public warrants continue to trade on Nasdaq under the ticker symbol “BETRW” with the same CUSIP number.

Effective August 16, 2024, as a result of the reverse stock split, every 50 shares of the Company’s issued and outstanding common stock were converted into one issued and outstanding share of Class A common stock, Class B common stock and Class C common stock, as applicable, without any change to the par value per share, the voting rights of the common stock, any stockholder’s percentage interest in the Company’s equity (subject to the effects of fractional shares) or any other aspect of the common stock. This reduced the number of the Company’s outstanding Class A common stock from 424,783,460 shares to 8,497,010 shares, outstanding Class B common stock from 259,770,986 shares to 5,194,080 shares and outstanding Class C common stock from 71,877,283 shares to 1,437,545 shares. No fractional shares were issued in connection with the reverse stock split. Stockholders who would have otherwise received a fractional share of the Company’s common stock following the reverse stock split will receive a pro rata portion of cash proceeds from the aggregation and sale of all fractional shares by the exchange agent, Computershare Inc., together with its affiliate Computershare Trust Company, N.A. (800-546-5141 (Within the United States and Canada); 781-575-2765 (Outside the United States and Canada)). Stockholders are not required to take any action to exchange their shares.

For more detailed information relating to the reverse stock split, please refer to the related Form 8-K filed with the U.S. Securities and Exchange Commission on August 19, 2024, in connection with the completion of the reverse stock split.

About Better

Since 2017, Better Home & Finance Holding Company (NASDAQ: BETR; BETRW) has leveraged its industry-leading technology platform, Tinman™, to fund more than $100 billion in mortgage volume. Tinman™ allows customers to see their rate options in seconds, get pre-approved in minutes, lock in rates and close their loan in as little as three weeks. Better’s mortgage offerings include GSE-conforming mortgage loans, FHA and VA loans, and jumbo mortgage loans. Better launched its “One Day Mortgage” program in January 2023, which allows eligible customers to go from click to Commitment Letter within 24 hours. Better was named Best Online Mortgage Lender by Forbes and Best Mortgage Lender for Affordability by WSJ in 2023, ranked #1 on LinkedIn’s Top Startups List for 2021 and 2020, #1 on Fortune’s Best Small and Medium Workplaces in New York, #15 on CNBC’s Disruptor 50 2020 list, and was listed on Forbes FinTech 50 for 2020. Better serves customers in all 50 US states and the United Kingdom.

Forward-looking Statements

This press release contains certain forward-looking statements within the meaning of federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. Such factors can be found in the Company’s annual report on Form 10-K and the Company’s quarterly reports on Form 10-Q, which are available, free of charge, at the SEC’s website at www.sec.gov. New risks and uncertainties arise from time to time, and it is impossible for Better to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and Better undertakes no obligation, except as required by law, to update or revise the forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240819250630/en/

For Investor Relations Inquiries please email ir@better.com

Source: Better Home & Finance Holding Company

FAQ

What was the ratio of Better Home & Finance Holding Company's (BETR) reverse stock split?

Better Home & Finance Holding Company (BETR) completed a 1-for-50 reverse stock split on August 16, 2024.

When did BETR's stock begin trading on a split-adjusted basis?

BETR's stock began trading on a split-adjusted basis on the Nasdaq upon market open on Monday, August 19, 2024.

How many shares of BETR's Class A common stock are outstanding after the reverse split?

After the reverse split, BETR's outstanding Class A common stock was reduced from 424,783,460 shares to 8,497,010 shares.

What happens to fractional shares resulting from BETR's reverse stock split?

Stockholders who would have received fractional shares will get a pro rata portion of cash proceeds from the sale of all fractional shares by the exchange agent.