eToro SPAC merger is getting delayed to 2022

abdelaziz Fathi

Social investment platform, eToro expects its Wall Street debut to be delayed until 2022 because of regulatory hurdles for special purpose acquisition companies, Israeli news outlet Calcalist cited anonymous sources.

etoro

Per a recent report, eToro will not complete its SPAC merger with US SPAC Fintech Acquisition Corp by the end of 2021.

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.

“The company is in a process of transition into a public company by merging with the SPAC FinTech V and we are working with all the relevant bodies in order to complete the process as soon as possible,” the report reads.

The recent adjournment, however, could lead to the cancellation of the proposed merger with the prolific investor Betsy Cohen’s firm. More specifically, the private investment public equity (PIPE) investors are now entitled to cancel their participation in the deal, or demand a change in the pricing.

But until further notice, sources told Calcalist the deal will eventually go ahead at the original valuation alongside the original PIPE investment of $650 million. They added that eToro wanted to be transparent with the market at this point, but the firm still expects to sign with the investors on extension agreements.

eToro posts a Q3 loss of $100 million

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 below $10.0, down by a third off the peak it hit in March at $15.29.

In essence, a SPAC is a shell company that lists on a stock exchange with the purpose of buying another business and taking it public without consuming the time, costs and regulatory oversight required for traditional IPOs.

eToro, which lost $100 million in Q3 2021, is now competing with the likes of Robinhood, Vanguard, E-Trade in the US after it secured the membership of Financial Industry Regulatory Authority, Inc. (FINRA). Additionally, it allowed US customers to trade stocks at no cost in July, ramping up the intensity of the brokers’ fight to eliminate trading commissions.

In eToro’s existing markets, the company’s 24 million-plus users are able to trade and hold more than 1,500 markets, including stocks, bonds, cryptocurrencies, forex, commodities and more.

Read this next

Digital Assets

Bitcoin.com Wallet adds several ERC-20 tokens

The product expansion includes representatives of the DeFi world, the Metaverse, and the largest stablecoins.

Market News

Savvy Investors to Profit Whether the Stock Market Rebounds or Not

Equities have gone up enormously since the low. SP500 has gained 13.88% since June 17. In August, the indices drifted sideways. On Wall Street, veteran investors expect a move in either direction.

Industry News

Wall Street-backed MEMX obtains SEC approval for options trading platform

The company has raised more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley.

Industry News

Amundi US launches ESG strategy that seeks to outperform S&P 500

Amundi’s Responsible investing team includes more than 45 specialists, and its ESG analysis covers more than 13,500 issuers across debt and equity.

Industry News

Verto launches embedded FX payments solution

The Verto API automates currency conversions, tracks payments and exchange rates in real-time, and is being launched in the follow-up of a $10 million in Series A funding last year.

Industry News

SEC awards over $16m to whistleblowers after another successful enforcement action

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice.

Digital Assets

Ripple submits most succint explanation of Hinman issue in XRP lawsuit

It might be useful to get up to date as this could be the end of the road for the SEC.

Retail FX

TradingView integrates first Brazilian broker, Órama Investimentos

Órama offers all kinds of investment products, from fixed income to crypto-related funds.

Digital Assets

TRON approves Wintermute to mint, burn USDD stablecoin

TRON Reserve DAO has welcomed crypto market-making giant Wintermute as the ninth member and whitelisted institution to mint Tron network’s stablecoin, Decentralized USD (USDD).

<