eToro Cancels SPAC deal with FinTech Acquisition Corp. V. Company

Social investing network eToro Group announced Tuesday its decision to cancel its planned public listing via a merger with FinTech Acquisition Corp. V. SPAC.

eToro claimed that the closing conditions set by the two firms in March 2013 when the merger was proposed were not met.

Two firms announced the merger proposal in March 2021. However, further agreements and amendments failed to meet closing conditions within the stipulated timeframe.

The two companies were unable to meet the June 30 deadline, which led to the cancellation of their planned merger.

eToro announced its plan to the other parties in March 2013. It stated that it expected a valuation of $10.4 million. Betsy Cohen, FinTech V Chairman, cited eToro’s strengths as a social trading platform outside of the US and its multiple income streams. The merger entity was to create a combined entity of $10.4 billion. This would reflect an implicit business value of $9.6 billion for eToro.

The latest meeting between the firms revealed new information. Betsy Cohen was the Chairman of Fintech V and spoke about the development, saying: “The transaction is impossible because of circumstances beyond either party’s control.”

Yoni Assia is CEO of eToro. He also stated that “While this may be not the outcome we hoped to achieve when we began this process,” but that eToro’s underlying businesses remain healthy, and that our balance sheets are strong, and we will continue to balance growth with profitability.

The decision was mutually reached by the firms and no termination fees are required.

Market Plunge Affecting SPAC Deals

The cancellation of the eToro SPAC agreement comes at a moment when many crypto firms have been trying to go public since last year’s bull market. They have been stuck in long ups and downs dealing with the US Securities and Exchange Commission.

The accountants at SEC have been more critical of crypto firms’ attempts to merge with blank-check businesses, as crypto-assets present unique bookkeeping challenges.  

Besides, the dates for multibillion-dollar deals involving crypto businesses (such as eToro or Bullish Global) were postponed numerous times, and even cancelled due to poor market conditions.

SPACs were the most popular way Wall Street attempted to reach the public market. Due to the current market crash, and SEC’s strict regulations, however, this craze has fallen.

SPACs are experiencing volatility due to current market conditions. SPAC deals will be revalued to reflect current market conditions. SEC has also been more cautious regarding the SPAC process, especially when it comes to crypto-related transactions.

Image source: Shutterstock

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