FX week in review: eToro’s $10B SPAC IPO, Swissquote results
Forex industry news was dominated this week by eToro’s plans to go public, via a merger with a SPAC that will value eToro at more than $10 billion.
The importance – and size – of the transaction cannot be overemphasized. eToro’s market cap, assuming that the deal goes ahead as planned, will be more than the combined valuations of virtually all other publicly traded Retail FX brokers out there including IG, Plus500, Swissquote, CMC Markets, XTB and NAGA Group. Add all those up and you still don’t get to eToro’s $10.4 billion.
However eToro wasn’t the only one out there with a new financing deal. Investr ($20 million) and Genesis Global ($45 million) each raised funds as well.
There were also FX broker results to process such as Swissquote’s declining revenues/profits in the second half of 2020, Plus500’s Q1 Trading Update, and Exness’ record February.
Some of the top FX industry news stories to appear this week on FNG included:
eToro going public at $10.4 billion via a SPAC merger. eToro’s going-public plans were exclusively reported by FNG early Monday, after which a torrent of news stories followed on other sites. Here are our top stories articling the events as they unfolded.
Exclusive: eToro going public at $10B valuation via SPAC combo. FNG Exclusive… FNG has learned from sources in Israel that social trading focused online broker eToro is getting set to announce a going-public transaction, that will value the company at approximately $10 billion. eToro will apparently eschew the traditional IPO process, and go public via a combination with one or more SPACs. The company is reportedly finalizing negotiations on terms of the transaction with an existing US-listed SPAC, although that entity has yet to be identified. eToro’s deal is reportedly set to move forward within the next two weeks. eToro has taken other steps to help prepare for an IPO, such as the recent addition of Lord Stanley Fink to its Board.
eToro $10B IPO SPAC partner identified as Betsy Cohen’s Fintech Acquisition Corp V. Following our exclusive report from yesterday that Retail FX broker eToro was headed to the public markets at a $10 billion valuation via a merger with a special purpose acquisition company (SPAC), FNG has learned that the SPAC with which eToro will combine is Fintech Acquisition Corp V (NASDAQ:FTCVU). Fintech Acquisition Corp V went public as a SPAC in December 2020, raising $250 million in cash. The company will seek to raise another $600-700 million to facilitate the deal. The remainder of the $10 billion consideration will come as new FTCVU shares to be issued to eToro’s shareholders.
eToro confirms $10.4 billion SPAC deal with FinTech Acquisition. Well, you heard it here first folks. Following our initial exclusive report early yesterday that Retail FX broker eToro was planning on going public by combining with a special purpose acquisition company (SPAC) which would value the company at $10 billion – which a certain other FX blog then dismissed as “market rumors” (although they weren’t shy about copying most of our article details) – eToro itself has issued a press release confirming the details which appeared here on FNG about both the going-public transaction, and the identity of the eToro SPAC. We’ll repost the company’s full press release on the matter below.
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.
Swissquote revenues fall 3% in 2H-2020, profits off 19%. Gland, Switzerland based online brokerage and banking firm Swissquote released its 2020 results today. While the company led off with the bold headline “Record result and profit to double by 2024”, the numbers actually indicate that Swissquote saw a slowing of activity and sharp decrease in profitability in the second half of the year, after a stellar 1H-2020. While 2020 as a whole was certainly a record year for Swissquote, revenues decreased by 3% from CHF 160.7 million to CHF 156.6 million from 1H to 2H 2020. Profits decreased by 19%, from CHF 50.4 million to CHF 40.6 million.
Plus500 touts Q1-2021 Customer Income ahead of Q4. CFDs broker Plus500 (LON:PLUS) issued a Trading Update on its performance in Q1-2021 to date, ahead of the company’s shareholder meeting today. The Trading Update (see full text below) gave out some mixed messages. It did indicate that client trading activity during Q1 “remained strong”, and that there was “continued outperformance” tracking ahead of Q4-2020 in Customer Income – i.e. revenue from customer spread. However Plus500 also noted that “monthly trading results remain volatile”. Plus500 had some issues late last year which led to a severe decrease in revenue and profitability in Q4.
Among the top FX industry executive moves reported at FNG this week were:
❑ Exclusive: Longtime Libertex sales head Igor Galkin moves to Scope Markets.
❑ Exclusive: HSBC FX sales vet Andy DePhillips joins RBC.
❑ Qontigo names Neal Pawar its Chief Operating Officer.
❑ Aparna Chennapragada joins Robinhood as Chief Product Officer.
❑ Credit Suisse Group appoints Ulrich Körner as member of Exec Board.