The online trading platform eToro, which offers commission-free trading on a wide range of assets, has postponed its debut to Wall Street due to regulatory difficulties associated with a merger with a special-purpose company - the so-called SPAC deal.
eToro IPO plan postponed to Q4 2021
EToro is now slated to go public in Q4 this year as part of a merger with Fintech Acquisition Corp, a company owned by serial entrepreneur Betsy Cohen. This was reported today by the Financial News.
The broker originally expected to complete the $10.4 billion deal in the third quarter. However, according to the press service of eToro, the company has already submitted Form F-4 and entered the home stretch, but regulators are in no hurry to approve listings through SPAC.
“As you probably noticed, all transactions through SPAC were delayed due to delays at the SEC, especially in the financial technology area. Apparently, we, too, will not escape this fate,” said a company spokesman in a statement.
According to S&P Global Market Intelligence, at the beginning of the year, the SPACs segment began to boom: companies raised $ 88 billion in the first three months. Later, activity dropped sharply, and in the second quarter, deals with empty companies fell 82%. Experts say regulators have dampened the hype with an increased focus on transparency.
In April, the US Securities and Exchange Commission (SEC) updated its requirements for companies seeking to go public through SPAC. The changes, which stated that orders issued as part of fundraising should be treated as liabilities and not as capital in financial accounts, were aimed at making the financial statements of companies listed on SPAC more transparent.
The company chosen by eToro was among those forced to re-file financial statements following the April updates.
As for the social platform itself, eToro posted a net loss of $89 million in the second quarter, mainly due to compensation payments of $71 million to employees and expenses related to the upcoming takeover of $36 million. From April to June, 2.6 million users registered on the platform, up from 3 million in the first quarter of 2021.
Despite the decline, the figures are still above the 2020 values. People managed to save some money during the pandemic, and the hype around cryptocurrencies also attracted investors to the platform.
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