With the deadline approaching for the completion of the SPAC merger of Israeli online trading platform eToro, market sources believe that it is increasingly likely that the merger will be canceled.
eToro first announced its SPAC merger with Wall Street businessperson Betsy Cohen's FinTech Acquisition Corp. V in March 2021 at a company valuation of $10.4 billion. Following declines in the market in the final quarter of 2021, eToro announced in December 2021 that the deadline for completing the deal had been extended to June 2022 and its valuation cut to $8.8 billion. In the current market climate on Wall Street, it is difficult to see eToro completing the merger at anything like such an amount.
Robinhood, eToro's famous rival in the social investment network trading platform sector, has seen its share price fall 73.5% since its IPO last summer and is 86% down since its peak in August, and 43% down since the start of 2022, giving it a market cap of $8.4 billion.
So far eToro has not officially announced the cancellation of the SPAC merger and theoretically the deal could still be completed but FinTech Acquisition Corp. has yet to summon its shareholders to a meeting to approve the deal, as required, and June 30 is fast approaching.
Instead of the SPAC merger, eToro is likely considering a private equity financing round of between $440 million and $690 million, similar to the amount it would have raised in the merger and through private investment public equity (PIPE) financing. However, the valuation of any such financing round would be significantly lower than the $8.8 billion in the SPAC merger.
eToro was founded in 2007 by brothers Yoni and Ronen Assia and David Ring. Yoni Assia serves as CEO. The company's platform allows users to invest in a range of stocks, commodities, indices and cryptocurrencies.
Published by Globes, Israel business news - en.globes.co.il - on May 23, 2022.
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