FAQ on eToro’s plans to become publicly traded through a business combination with FinTech Acquisition Corp. V

 

What is the change occurring at eToro?

  • eToro is becoming a publicly traded company. 
  • To do so, we are combining with a special purpose acquisition company (SPAC) named FinTech Acquisition Corp. V (NASDAQ: FTCV). 
  • At the close of the transaction, eToro will be listed on the Nasdaq stock exchange. 
  • The closing of the transaction remains subject to various closing conditions, including the approval of FinTech V’s shareholders. 

Who are the new investors in eToro? 

  • The new investors will be the stockholders of FinTech Acquisition Corp. V including Fintech V’s sponsors.
  • Fintech V is a Special Purpose Acquisition Corporation (SPAC) that was formed for the purpose of combining with one or more businesses and remaining a public company. 
  • Additionally, several institutional investors will become new investors in eToro as a result of the transaction. These include: ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management.

How is this different from a traditional IPO?

  • Going public through a SPAC is similar to a traditional IPO, in that at the close of the transaction, our company will list on the NASDAQ.
  • The SPAC route gave us the opportunity to partner with a sponsor who has deep expertise in the fintech space and an impressive track record in partnering with companies who are looking to become public. It was the synergies we have with FinTech V that meant we chose to pursue this option for going public.

Why did you choose this particular SPAC?

  • The Fintech V management team have deep expertise in the fintech space and an impressive track record in partnering with companies who are looking to become public. 
  • It was the synergies we have with FinTech V that meant we chose to pursue the SPAC option for going public.

What exchange will eToro list on and what will the ticker symbol be?

  • Immediately upon the closing of the proposed transaction, the combined company’s name will be eToro Group Ltd. and will likely trade on the NASDAQ.
  • The ticker symbol following the closing will be revealed in due course.

Why are you going public now?

  • We always envisioned  that one day investors on eToro would be able to invest in eToro stock.
  • Going public is a logical step in the ongoing evolution of our company.
  • Becoming a publicly traded company will support our continued expansion as a business. It will allow us to increase our market share, expand into new markets and continue to grow our innovative product offering to meet the evolving needs of our customers. 
  • As a public company, we will continue to be focused on our mission of empowering people around the globe to become better investors by providing them with the best possible tools to make informed and responsible investment decisions.

What are the benefits to me as a user of you being a public company?

  • Becoming a publicly traded company will support our continued expansion as a business. It will allow us to increase our market share, expand into new markets and continue to grow our innovative product offering to meet the evolving needs of our customers. 
  • And as a public company, we will continue to be focused on our mission of empowering people around the globe to become better investors by providing them with the best possible tools to make informed and responsible investment decisions.

When you talk about growth, what are your priorities?

  • We plan to continue driving innovation and the execution of our growth plan
  • We have multiple avenues for future growth, including:
    • Deepening relationships with existing customers
    • Adding new customers
    • Launching products in new geographies, such as stocks in the US later this year
    • New products such as the eToro Money debit card, and other new business lines we may choose to pursue.

Will your users be able to invest in the SPAC stock via the eToro platform?

  • Yes, the FinTech Acquisition Corp. V (NASDAQ: FTCV) is on the eToro platform.

Are there any rules around how I can trade FTCV on eToro?

  • FTCV, and other SPACs available on eToro, are available to trade as long (BUY) positions.
  • CFDs including short or leveraged positions are not available.
  • FTCV, and the other SPACs available on eToro, are not available via copy trading and are not included in any of our CopyPortfolios. 

What does this transaction mean for the eToro Management team, should we expect to see longstanding employees cash out and leave the company?

  • The eToro management team remains fully committed to overseeing the next phase of eToro’s growth. We are all incredibly excited to take this next step.

How was the $9.6bn valuation calculated? 

  • The implied enterprise value of eToro is $9.6 billion which equates to 9.7 times estimated net revenues for 2022.

How was the $10.4bn valuation calculated? 

  • The estimated implied equity value of approximately $10.4 billion at closing is based on:
    • an implied enterprise value for eToro of approximately $9.6 billion
    • plus approximately $800 million increase in net cash 
    • PIPE will close concurrently with the business combination and investors include: ION Investment Group, Softbank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC, and Wellington Management. 

 

Cautionary Statement Regarding Forward-Looking Statements

This communication  contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed business combination between FinTech Acquisition Corp. V (“FinTech V”) and eToro. Forward-looking statements may be identified by the use of the words such as “ estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements as to the expected timing, completion and effects of the proposed business combination, are based on various assumptions, whether or not identified in this communication, and on the current expectations of eToro’s and FinTech V’s management, are not predictions of actual performance, and  are subject to risks and uncertainties.  These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to:  the risk that the proposed business combination may not be completed in a timely manner or at all; the failure to satisfy the conditions to the consummation of the proposed business combination; the inability to complete the PIPE investment; the occurrence of any event, change or other circumstance that could give rise to the termination of the  proposed merger agreement; the amount of redemption requests made by FinTech V’s public stockholders; the effect of the announcement or pendency of the proposed business combination on eToro’s business; risks that the proposed business combination disrupts current plans and operations of eToro; potential difficulties in retaining eToro customers and employees; eToro’s estimates of its financial performance; changes in general economic or political conditions; changes in the markets in which the eToro competes; slowdowns in securities trading or shifting demand for security trading product; the impact of natural disasters or health epidemics, including the ongoing COVID-19 pandemic; legislative or regulatory changes; the evolving digital asset market, including the regulation thereof; competition; conditions related to eToro’s operations in Israel; risks related to data security and privacy; changes to accounting principles and guidelines; potential litigation relating to the proposed business combination; the ability to maintain the listing of eToro’s securities on the Nasdaq Capital Market; the price of eToro’s securities may be volatile; the ability to implement business plans, and other expectations after the completion of the proposed business combination; and unexpected costs or expenses. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of FinTech V’s registration statement on Form S-1 (File No. 333-249646) (the “Form S-1”), eToro’s registration statement on Form F-4 (when available) and other documents if and when filed by eToro or FinTech V from time to time with the U.S. Securities and Exchange Commission (the “SEC”). If any of these risks materialize or our assumptions prove incorrect, actual events and results could differ materially from those contained in the forward-looking statements. There may be additional risks that neither eToro nor FinTech V presently know or that eToro and FinTech V currently believe are immaterial that could also cause actual events and results to differ. In addition, forward-looking statements reflect eToro’s and FinTech V’s expectations, plans or forecasts of future events and views as of the date of this communication. eToro and FinTech V anticipate that subsequent events and developments will cause eToro’s and FinTech V’s assessments to change. While eToro and FinTech V may elect to update these forward-looking statements at some point in the future, eToro and FinTech V specifically disclaim any obligation to do so, unless required by applicable law.

Any financial information or projections in this communication are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond eToro’s and FinTech V’s control.  The inclusion of financial information or projections in this communication should not be regarded as an indication that eToro or FinTech V, or their respective representatives and advisors, considered or consider the information or projections to be a reliable prediction of future events.

The financial information included in this communication has been taken from or prepared based on eToro’s historical financial statements.  eToro’s historical financial statements have been audited by Ernst & Young in accordance with generally accepted auditing standards in Israel and prepared in conformity with International Financial Reporting Standards.  eToro’s historical financial statements have not been audited in accordance with the Public Company Oversight Board (“PCAOB”) standards or prepared in accordance with Regulation S-X promulgated under the Securities Act of 1933, as amended.  eToro cannot assure you that, had the historical financial information included in this communication been compliant with Regulation S-X and audited in accordance with PCAOB standards, there would not be differences, and such differences could be material.  An audit of eToro’s financial statements in accordance with PCAOB standards is currently in process and will be included in the proxy statement/prospectus with respect to the business combination.  Accordingly, there may be material differences between the presentation of eToro’s historical financial statements included in this communication and in the proxy statement/prospectus, including with respect to, among others, the method of accounting for assets held by eToro’s customers on eToro’s platforms, the method of accounting for revenue attributable to trading in asset classes and jurisdictions where we are not registered as a broker-dealer, off balance sheet items, timing of revenue recognition and asset classification.

No Offer or Solicitation

This communication is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination and shall not constitute an offer to sell or exchange, or a solicitation of an offer to buy or exchange, the securities of eToro, FinTech V or the combined company, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Additional Information about the Business Combination and Where to Find It

eToro intends to file a registration statement on Form F-4 with the SEC, which will include a preliminary proxy statement to be distributed to FinTech V’s stockholders in connection with FinTech V’s solicitation of proxies for the vote by FinTech V’s stockholders with respect to the proposed business combination. After the registration statement has been filed and declared effective, FinTech V will mail a definitive proxy statement / prospectus to its stockholders as of the record date established for voting on the proposed business combination and the other proposals regarding the proposed business combination set forth in the proxy statement. eToro or FinTech V may also file other documents with the SEC regarding the proposed business combination.

Before making any voting or investment decision, investors and security holders are urged to carefully read the entire registration statement and proxy statement / prospectus and any other relevant documents filed with the SEC, and the definitive versions thereof (when they become available and including all amendments and supplements thereto).

Investors and security holders will be able to obtain free copies of the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by eToro or FinTech V through the website maintained by the SEC at www.sec.gov.

Participants in the Solicitation

eToro and FinTech V and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders of FinTech V in connection with the proposed business combination under the rules of the SEC. FinTech V’s stockholders, eToro’s shareholders and other interested persons may obtain, without charge, more detailed information regarding the names, affiliations and interests of directors and executive officers of eToro and FinTech V in FinTech V’s final prospectus filed with the SEC on December 7, 2020 or eToro’s Form F-4 (when available), as applicable, as well as their other filings with the SEC. Other information regarding persons who may, under the rules of the SEC, be deemed the participants in the proxy solicitation of FinTech V’s stockholders in connection with the proposed business combination and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the preliminary proxy statement / prospectus and will be contained in other relevant materials to be filed with the SEC regarding the proposed business combination (if and when they become available). You may obtain free copies of these documents at the SEC’s website at www.sec.gov.