financemagnates.com
eToro’s attempt for a public listing is at risk as the broker might fail to close its merger with the American blank-check company before the end of 2021, Israeli news outlet Calcalist reported on Monday.
Israel-headquartered eToro confirmed its upcoming merger with FinTech Acquisition Corp. V, a SPAC promoted by well-known businesswoman Betsy Cohen. When closed, the deal will put the valuation of the merged entity at $10.3 billion.
The multi-asset broker already pushed the closure deadline from the end of the third quarter of 2021 to the fourth quarter of the year. The report pointed out that though there are only a few weeks left for the end of the closure deadline, “no shareholders meetings [is] in sight [and] it is clear that the merger will not be completed in 2021.”
However, that does not mean the merger deal will fall apart as SPAC investors can still vote to proceed with the merger or withdraw the investment proceeds.
PIPE Investors
But, if the deadline is missed, the broker might face issues with the private investment in public equity (PIPE) investors, who committed to inject $650 million, the report highlighted. These institutional investors include SoftBank's Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management.
eToro, however, can convince the investors again to extend their investment commitment.
“eToro is in the process of becoming a public company via a business combination with FinTech V. We are working with all relevant parties to conclude this as soon as possible. We are incredibly excited about this next chapter in the eToro story,” eToro noted in a statement shared with Finance Magnates.
Meanwhile, the performance of eToro remains strong as the broker reported a 66 percent surge in the total commissions generated in the third quarter of 2021 to $222 million. The UK unit of the group also posted a 717 percent jump in its revenue in fiscal 2020.