eToro Buys TradeZero for Up to $231 Million as Shares Slide on Mixed Quarter; SPACs Fill a Quiet IPO Window
eToro Group used a bruising earnings day to unveil its biggest acquisition as a public company. The Israel-based retail brokerage agreed to acquire TradeZero, a U.S.-focused platform for active traders, for up to $231 million in cash plus the issuance of up to 2.5 million Class A shares, according to deal terms reported by MoneyCheck. The transaction is expected to close in the first half of 2027, subject to regulatory approval.
TradeZero brings eToro a business generating roughly $80 million in trailing-twelve-month revenue at 81% gross margins, per MoneyCheck, along with something eToro has lacked: access to the Canadian market. Management said it expects the deal to be accretive to adjusted earnings per share in the first full year after closing, positioning the purchase as a way to deepen eToro’s reach among high-frequency retail traders rather than the casual social-investing crowd it built its brand on.
The deal announcement could not fully offset a messy quarter. eToro reported second-quarter net income of $53 million, up 77% from $30 million a year earlier but short of the $55.1 million analysts expected, even as adjusted earnings of $0.68 per share beat the $0.61 consensus, per MoneyCheck. Net contribution rose 9% to $229 million, funded accounts grew 18% to 4.28 million, and assets under administration climbed 10% to $19.2 billion.
Shares fell 8.2% following the results, according to Investing.com’s earnings coverage, and MoneyCheck reported the decline stretched past 11% at its Tuesday worst — a company-specific selloff on a day the broader market was roughly flat. The culprit sits in eToro’s revenue mix: the company disclosed that July cryptocurrency trades totaled just 1.4 million, down 73% year over year, with average transaction size halving to $182 amid a broad digital-asset slump.
For the deal itself, the crypto weakness is arguably the point. TradeZero’s equities-centric, active-trader business would dilute eToro’s dependence on crypto trading cycles, which have whipsawed its results since the company came public. Buying a high-margin brokerage during a soft patch in its own stock is an aggressive bet that diversification is worth paying for now rather than later.
The acquisition landed in an otherwise sleepy stretch for new issues. This week’s U.S. IPO calendar is dominated by blank-check vehicles and micro-deals, according to IPOScoop’s calendar: Leader’s Advantage Acquisition, a $150 million SPAC, was set for Tuesday, with Southern Cross Acquisition II’s $100 million unit offering, industrial name BW Industrial Holdings, optics firm MetaOptics and restaurant operator Riku Dining Group among the small deals lined up through Friday.
The pipeline’s more substantial test comes next week, when Lyntris is scheduled to offer 24 million shares at $19 to $22, per IPOScoop — a deal that could raise around half a billion dollars at the top of the range and give the late-summer IPO market its first real read on institutional appetite since the spring.
