eToro Group fell 8.9% after announcing a $231M acquisition of TradeZero. The stock-based payment structure and a 2027 close timeline drove dilution fears. Revenue from TradeZero hit $80M with an 81% gross margin.
eToro Group Ltd. currently carries an Alpha Score of n/a, giving AlphaScala's model a neutral read on the setup.
Shares of eToro Group slid 8.89% to $30.98 after the company announced a deal to buy TradeZero for up to $231 million, a drop that erased roughly $200 million in market value on the session. The acquisition price includes cash and up to 2.5 million newly issued eToro Class A common shares, tying part of the payout to the stock's future performance.
TradeZero reported $80 million in revenue over the latest 12 months, with an 81% gross margin. The firm runs brokerage infrastructure for active traders across the U.S., Canada, and other international markets. eToro said the deal will strengthen its U.S. presence and add tools for sophisticated retail clients.
Jefferies advised eToro on the transaction, with Simpson Thacher and Bartlett as legal counsel. J.P. Morgan Securities advised TradeZero, supported by Choate Hall and Stewart.
The stock fell toward its intraday low as the session wore on. Several traders said the market was pricing in dilution from the share component and the extended timeline. eToro expects the acquisition to close in the first half of 2027, pending regulatory approvals.
Management said the deal will be accretive to adjusted earnings per share within 12 months of closing. The gap between announcement and close leaves room for execution risk and shifts in market sentiment, analysts said. eToro's shares have traded around $34 before the news.
The acquisition gives eToro access to TradeZero's broker-dealer licenses, order routing technology, and a customer base that leans on short-selling and direct market access. eToro plans to merge the two platforms and expand product offerings for U.S. investors. The Canadian operations of TradeZero also provide a springboard for eToro's regional expansion.
For a broader look at platforms offering crypto and equity trading, see best crypto brokers.
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