eToro SPAC merger valuation cut 15%

The delay in completing its SPAC merger, the overall cooling of stock markets and the sharp fall in the share price of rival company Robinhood, have led to a cut in the valuation of Israeli trading platform eToro, and the amount of money it will raise.

US special purpose acquisition company (SPAC) Fintech Acquisition Corp. V (Nasdaq: FCTVU) has announced that the valuation of eToro will be cut 15% from $10.4 billion to $8.8 billion, after money ($7.9 billion before money) and that it will inject $210 million into the merged company, down from $250 million. SPAC companies are blank check companies that raise money on the stock market in order to merge with an existing company, within a specific period of time.

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The SPAC merger was due to be completed by December 31 and the postponement has also entitled the PIPE (public investment private equity) investors to cancel, or re-price the deal. The PIPE investors including ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management have agreed to extend the deadline until June 30, 2022 but have cut the investment from $650 million to $441 million, following a 30% fall in the share price of rival Robinhood in recent weeks.

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.

eToro recently published that 2021 revenue will be about $1.2 billion, compared with its original forecast of $1.02 billion (net revenue of $807 million). The company has gained nine million new users in 2021.

Published by Globes, Israel business news – en.globes.co.il – on December 31, 2021.

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