SPAC expenses drag eToro to loss

Yoni Assia Photo: eToro PR

The Israeli trading platform hopes to complete its SPAC merger this quarter at a company valuation of $10.4 billion.

For the second consecutive quarter, Israeli trading platform eToro has reported a net loss due to large expenses and capital remuneration ahead of its upcoming SPAC merger. eToro had been due to merge with US SPAC FinTech Acquisition Corp. V last quarter at a company valuation of $10.4 billion but completion of the deal has been delayed until this quarter.

In the third quarter of 2021, eToro reported commissions of $222 million, up 66% from the corresponding quarter of 2020 and net trading income of $176 million, up 56% from the corresponding quarter of 2020. Net loss was $98.2 million compared with a net profit of $7.6 million in the third quarter of 2020. The net loss was due to a non-cash charge of $60 million in stock-based compensation for eToro employees and $11 million of transaction costs related to the business combination with FTCV. Adjusted EBITDA for the third quarter of 2021 was negative $25 million, largely driven by the company’s significant investments in growth initiatives, including marketing.

eToro cofounder and CEO Yoni Assia, eToro said, "As we approach the close of 2021, there is a growing number of retail investors around the world actively engaging with capital and crypto markets. Our users are investing in the companies they believe in and those they engage with. With market prices reaching all time highs, we are seeing more widespread adoption of eToro’s platform and we expect retail participation to continue to grow as more people appreciate the benefits of taking control of their finances."

eToro was founded in 2007 by brothers Yoni and Ronen Assia and David Ring. The company's platform allows users to invest in a range of stocks, commodities, indices and cryptocurrencies. Under the terms of the SPAC merger, eToro will receive an injection of $250 million in cash raised by FinTech Acquisition Corp. V together with a an additional $650 million in commitments for a common share private placement (PIPE) from leading investors including ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management.

Published by Globes, Israel business news - en.globes.co.il - on November 14, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Yoni Assia Photo: eToro PR
Yoni Assia Photo: eToro PR
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