eToro downgrades IPO valuation to $8.8 billion, merger set to close in June

abdelaziz Fathi

eToro has lowered its going-public-through-SPAC valuation down to $8.8 billion from the earlier planned $10.4 billion, as market conditions change and SPACs face more headwind.

etoro

Israeli social trading network has also pushed back the completion of its reverse merger deal with US SPAC Fintech Acquisition Corp, the black check company backed by Betsy Cohen that is taking it public. Specifically, the deal deadline was extended from the earlier anticipated close on December 31, 2021 to June 30, 2022, though the two insist they will close the deal before that date.

According to its most recent filing with the US Securities and Exchange Commission, the merger plans were scheduled to terminate automatically on December 31, 2021.  Despite their ‘best efforts’, the parties haven’t satisfied the requisite closing conditions set forth in the original merger agreement, including eToro’s registration statement on Form F-4 to be effective.

That said, there are some financial changes in the newly restructured deal between the two parties. Calling it a “strategic revision of the transaction terms,” eToro is downgrading its pre-money valuation estimate from $9.301 billion to $7.906 billion. As such, the estimated implied post-money equity value of eToro is approximately $8.8 billion.

In addition, the number of price adjustment rights that correspond to the $17.50 price trigger issuable to eToro shareholders was reduced on a one-for-one basis for every warrant.

SPAC stock trades below $10

“Additionally, the investors party to the Amended Subscription Agreements will receive warrants to purchase common shares of eToro if, following the closing, the eToro closing stock price is equal to or greater than $17.50 over a specified period, which warrants have substantially similar terms to the terms of the Price Adjustment Rights. Under the Amended Subscription Agreements, as of the date of this communication, eToro has received commitments for $441 million in the aggregate,” the statement further reads.

Going public through a blank-cheque company was originally scheduled for a Q3 closing at a massive $10.4 billion valuation. However, meeting investors to pitch a direct listing has hit a bump and the deadline was pushed back to the fourth quarter as the SPAC boom was already fading away.

Although the merger plans have yet to be completed, the share of the SPAC has suffered low demand compared to where it had been when eToro originally revealed its IPO plan. As of writing, the stock is trading at $9.9, down by a third off the peak it hit in March at $15.29.

Read this next

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<