Stock and crypto trading service eToro has called off a SPAC merger and will stay private, the company said Tuesday. The company is also laying off about 6% of its staff.
The Betsy Cohen-led FinTech Acquisition Corp. and eToro said in a joint statement Tuesday that the companies had not met agreed-upon closing conditions for the blank-check merger ahead of a June 30 deadline. The deal valued eToro at about $10 billion when it was reached in March 2021.
The two sides did not clarify which conditions were not met ahead of the deadline. Cohen said in a statement that the "transaction has been rendered impracticable due to circumstances outside of either party’s control."
The split comes as rocky economic conditions have brought public debuts for companies to a near standstill and sunk the market values of previously high-flying tech firms. There were 70 SPAC debuts in the first half of 2022, according to SPAC Track, compared to 614 for all of 2021.
Robinhood, an eToro competitor, has lost nearly 80% of its market value since it went public in August 2021.
Earlier this year, eToro joined FTX, Coinbase and Crypto.com in a Super Bowl ad-buying bonanza. But crypto values have continued to fall since then.
In a blog post on Tuesday headlined "Staying private (for now!)," eToro CEO Yoni Assia wrote that last year "was an ideal operating environment for our business, with strong bull markets in both stocks and crypto, and we have seen (two) years of 100% growth in revenues and 1,000% growth in customer assets. So far, 2022 has started with a thud with the S&P 500 off to its worst start in more than 50 years and most crypto assets down 50% or more pushing us into a bear market for both stocks and crypto."
Along with calling off the deal, the company confirmed it is laying off about 6% of its staff, citing market conditions. It joins a list of crypto trading firms to cut jobs that includes Coinbase, Gemini and Robinhood.
"After a period of hyper growth, it is now necessary to take a more balanced approach between growth and profitability," said Elad Lavi, vice president of Strategy at eToro in an emailed statement. "Over the past 15 years eToro has weathered many market cycles, emerging stronger from the experience. Despite the current headwinds, our underlying business remains healthy, our balance sheet is strong and we are confident in our long term growth strategy.”
Calcalist first reported the layoffs, noting about half of the 100 jobs cuts would come in Israel, where eToro is headquartered.
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