Johnson Fistel, PLLP opened a federal securities law investigation into Better Home & Finance Holding Company (NASDAQ: BETR) after founder Vishal Garg stepped down as CEO and the company reported a $30.6 million Q2 net loss. The investigation follows a 36.7% single-day stock decline on Aug. 4 and a 28.5% drop in May after management deferred its $1 billion monthly funded loan volume target.
Johnson Fistel opened a securities investigation into Better Home & Finance after its CEO exit and 36.7% stock plunge.
Johnson Fistel, a shareholder rights law firm with offices in California, New York, Georgia, Idaho, and Colorado, said it is investigating potential violations of federal securities laws by the company, according to a press release issued Aug. 12. The firm was recognized as one of the Top 10 Plaintiff Law Firms by ISS Securities Class Action Services and recovered approximately $90.7 million for investors in 2024.
On Aug. 3, Better announced founder Vishal Garg stepped down as CEO, effective immediately, with board member Daniel Lewis appointed interim CEO. Garg remained on the company's board of directors. In connection with the leadership change, Better released preliminary second-quarter results and announced plans to significantly increase cost-reduction efforts, raising its annualized target to more than $45 million by year-end 2026 from a previously announced $25 million.
On Aug. 6, Better reported a Q2 net loss of approximately $30.6 million and an Adjusted EBITDA loss of approximately $14.0 million. Loan volume reached approximately $1.67 billion, up year-over-year, with total revenues of approximately $54.7 million. The company's Q2 GAAP EPS of negative $1.69 missed consensus by $0.42, while revenue beat estimates by $1.85 million.
The investigation follows two sharp selloffs. Shares fell 36.7% on Aug. 4 after the leadership announcement, and dropped 28.5% in May after management deferred its $1 billion monthly funded loan volume target, citing the interest-rate environment. BETR shares traded at $15.28 as of Aug. 12, down from $42.69 in early May, giving the company a market capitalization of approximately $293 million with short interest at 18.4%.
Better's third-quarter guidance calls for loan volume of approximately $1.375 billion to $1.525 billion and total net revenues of approximately $49 million to $52 million, both below the company's second-quarter figures. The guidance reflects management's expectation that mortgage origination volumes will remain pressured by elevated interest rates.
Investors who purchased BETR securities and suffered losses can contact Johnson Fistel at no cost to discuss their legal rights. The firm represents individual and institutional investors in shareholder litigation involving securities fraud, breaches of fiduciary duties, and other violations of state and federal law.
The investigation adds legal uncertainty to a stock already trading near multi-year lows. Investors will watch for any formal complaint filing and the company's Q3 earnings report for further signals on the cost-reduction plan's execution.
This article is for informational purposes only and does not constitute investment advice.
