eToro SPAC FinTech Acquisition V trades up 50% after deal confirmed
Shares of special purpose acquisition company (SPAC) Fintech Acquisition Corp V traded up by more than 50% on Tuesday, after the SPAC’s sponsors confirmed that it would be merging with Retail FX, CFDs and crypto broker eToro.
The transaction, which will also see additional outside financing of $650 million provided by ION, Softbank, Third Point, Fidelity, and Wellington Management, will value eToro at about $10.4 billion and is expected to close in the third quarter of 2021.
eToro’s plans to go public by combining with a SPAC was first reported here at FNG early Monday, with the identity of the SPAC as one in Betsy Cohen’s FinTech Acquisition series (NASDAQ:FTCVU) being unveiled early Tuesday, which eToro and FTCVU confirmed later in the day.
The sharp rise in FTCVU shares on Tuesday clearly indicates that the public investors who put money into the $250 million SPAC were quite pleased regarding the SPAC’s choice of a “dance partner”. Other SPACs have traded sideways or even down when announcing their acquisition target.
Beyond cheering the deal, the importance of FTCVU shares trading up should not be minimized in that the deal needs to be approved by the SPAC-holders. Typical SPAC terms, including those in the FinTech Acquisition series, require the shareholders of the SPAC to approve the transaction. If the deal is not approved, they can just get their initial investment back. That “floor” basically would kill a suggested acquisition, unless the SPAC shares are trading above their initial issue value.
FTCVU shares, one month price chart. Source: Google Finance.