Aug 25 (Reuters) - Shares in Better Home & Finance Holding clawed back some lost ground in premarket trading on Friday, after the online mortgage lender plunged in a dismal debut a day earlier following a merger with a blank-check company.

The company's shares climbed 22.6% to $1.41 in trading before the bell on Friday. They had finished Thursday's session down 93.4%.

The stock was among the most active tickers on retail investor-focused forum Stocktwits.com.

The company hit the headlines in December 2021 after it laid off 900 employees via Zoom, and has since seen its profit dented by high mortgage rates that have dampened demand for home loans.

Better planned to go public via a $6 billion special-purpose acquisition company (SPAC) merger with Aurora Acquisition Corp in 2021, but delayed the deal amid a U.S. Securities and Exchange Commission inquiry and multiple rounds of layoffs.

"Here is an example of the exact wrong company at the wrong time - SPACs are hated and anything related to mortgage lending is hated at the moment," said Thomas Hayes, chairman at Great Hill Capital.

"That could change and as rates come down, there could be some value here but for now it is probably a don't touch."

U.S. mortgage rates have extended their surge as government bond yields rally. The popular 30-year fixed rate hit its highest level since 2000 last week, causing mortgage applications to hit a 28-year low.

SPACs are shell companies that raise funds through a public listing with the goal of acquiring a private company and taking it public.

Amid ultra-low interest rates, the SPAC market exploded in 2021, but has since sputtered amid rising interest rates, high redemption rates and increased regulatory scrutiny. (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila)