eToro Terminates the SPAC Agreement with FinTech Acquisition Corp. V. Business

eToro Group, a social investment network, stated on Tuesday that it had canceled its planned public listing via a merger with FinTech Acquisition Corp. V. SPAC (special purpose acquisition company).

The closing requirements agreed upon by the two companies when the merger was proposed in March of last year, according to eToro, have not been met.

The two companies announced their intention to merge in March 2021, but subsequent agreements and changes have failed to achieve the closing conditions within the stipulated period.

As a result, the two companies were unable to meet the transaction deadline of June 30, prompting the abandonment of their planned merger for an IPO (IPO).

When the two parties announced their proposal in March of last year, eToro estimated a valuation of $10.4 billion. FinTech V Chairman Betsy Cohen, on the other hand, emphasized eToro's merits as a social trading firm outside of the United States, as well as its many revenue streams. In other words, the merger company was meant to generate a combined entity worth $10.4 billion, indicating a $9.6 billion implied business value for eToro.

However, the most recent meeting between the two firms resulted in new findings. Betsy Cohen, Chairman of Fintech V, commented on the news, saying, “The transaction has been deemed unfeasible owing to events beyond either party's control.”

“While this may not be the outcome that we hoped for when we started this process,” said eToro CEO Yoni Assia, “eToro's underlying company remains healthy, our balance sheet is strong, and we will continue to balance future development with profitability.”

Because the two firms mutually agreed on the decision, neither side is required to pay a termination fee.

Market Volatility Impacting SPAC Transactions

The suspension of the eToro SPAC offer comes at a time when crypto firms attempting to go public since the bull market last year have been bogged down in lengthy ups and downs with the US Securities and Exchange Commission (SEC).

Because crypto-assets create unique bookkeeping concerns, efforts by crypto firms to join with blank-check companies have drawn heightened scrutiny from SEC accountants.

Furthermore, due to the poor market conditions, dates for finalizing multibillion-dollar agreements involving crypto firms (such as eToro, Bullish Global, and Circle Internet Financial Limited, among others) coming public have been postponed and even cancelled many times.

SPACs were the hottest option for Wall Street to enter the public market. However, the excitement has waned as a result of the current market crisis and the SEC's stringent regulations.

SPACs have been volatile and on a downward trend as a result of the current harsh market conditions. This means that parties involved in SPAC transactions are compelled to re-price them to reflect current market conditions. The SEC has also become more cautious regarding the SPAC procedure, particularly with regard to crypto-related transactions.

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