Reports today show digital brokerage eToro may be going public through a partnership with what Reuters refers to as a “blank-check” company affiliated with none other than serial entrepreneur Betsy Cohen, who has pulled off this kind of project before.
In the past, Cohen, who was formerly CEO of Bancrop, has used a type of entity called a Special Purpose Acquisition Company or SPAC to launch other firms including Paya and International Money Express.
Noor Zainab Hussain reports Cohen’s new SPAC raised $250 million in December 2020 and set up the apparatus for helping eToro to go public through an SPAC IPO methodology.
“EToro joins a wave of Israeli tech companies and startups including mobile gaming company Playtika Holding Corp, that are going public in the U.S. to take advantage of the capital markets boom,” Hussain writes.
With 20 million registered users, eToro allows traders to buy and sell cryptocurrencies, stocks, commodities and ETFs, along with other kinds of investment vehicles.
Many experts consider eToro to be in a space with brokerages like RobinHood, which have emerged to help average traders find new ways to get involved in the cryptocurrency space and other new fintech opportunities.
Here’s what eToro doesn’t have – the albatross around RobinHood’s neck from the Gamestop debacle in which the exchange suddenly allowed users to sell, but not buy. The outrage, in the wake of RobinHood’s sudden targeted shutdown and weak explanation, was palpable.
“The hate for Robinhood continues after it decided to freeze trades for GameStop last Thursday when Wall Street was in a frenzy for the video game retailer’s stock,” wrote James Martin at CNet at the time. “The popular trading app was one of the primary tools for individual investors who jumped on the GameStop roller coaster, which sent stocks up by more than 14,300% last week but has since plummeted to less than $53.50 as of Thursday’s closing bell. As much as Robinhood contributed to the stock’s gains, it’s also drawn flak from users, Wall Street and the US government for how it handled the activity.”
Although eToro has been vulnerable to some outages, it fared readily relatively well as creditors answered hedge fund managers in the all-out digital flame war over Gamestock and AMC equities. That leaves the platform in a good position to catch a lot of the traders fleeing RobinHood with their funds.
Look for the eToro to go public sometime soon.
