The Securities and Exchange Commission (SEC) has recently ended an investigation into online mortgage lender Better.com, allowing the company to continue operating without legal trouble. Better.com has been struggling financially and has been bleeding cash as it prepares to go public via a Special Purpose Acquisition Company (SPAC) vote.
The SEC had opened the investigation into Better.com in January of this year, after the company had mistakenly overstated its revenue for the fourth quarter of 2020. Better.com had originally stated that it had earned $209 million in revenue over the final quarter of 2020, but the number was then revised down to $158 million. This discrepancy led to the SEC investigation.
The conclusion of the investigation is a major relief for Better.com, which is now free to continue its plans to go public via a SPAC. The company’s proposed deal with Intercontinental Exchange (ICE) will see it valued at $6.5 billion, with a vote on the proposed merger expected to take place in the second quarter of 2021.
Despite the concluded investigation, Better.com has continued to struggle financially. In recent weeks, the company has been losing hundreds of thousands of dollars per month due to the high cost of customer acquisition and the low interest rates on mortgages. This has raised doubts over the company’s long-term sustainability, as some analysts fear that the huge losses could hinder the company’s ability to go public.
It is clear that Better.com still has its work cut out to ensure the success of the planned SPAC vote. The company must focus on investing in long-term strategies to reduce costs and increase profits before the vote takes place. If the company can turn things around, then the vote could result in a major windfall for the company and its investors. If not, then the company may be doomed to failure.
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