eToro's $231M TradeZero Deal Sends Stock Down 10%
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- eToro agreed to acquire US active-trader brokerage TradeZero for up to $231 million in cash and up to 2.5 million newly issued Class A shares, targeting a close in the first half of 2027.
- TradeZero, founded in 2015, generated about $80 million in revenue with 81% gross margins over the last twelve months and provides broker-dealer infrastructure across the US, Canada, and international markets.
- eToro's stock (ETOR) slid more than 10% to a low of $30.11 on Tuesday despite the company beating Q2 estimates with EPS of $0.68 versus $0.61 consensus.
- eToro's US crypto lineup remains limited to Bitcoin, Ethereum, and Bitcoin Cash after a 2021 SEC settlement, prompting a $70 million Zengo wallet acquisition and Ethereum-based tokenized stock trials.
- eToro reported 4.28 million funded accounts in Q2, up 18% year-over-year, but crypto revenue fell about 30% in the quarter even as $229 million in net contribution led overall growth.
Why it matters: The acquisition hands eToro the broker-dealer rails and active-trader base needed to take on Robinhood in US equities. The 10%+ stock slide despite an EPS beat reveals investor discomfort with share dilution from up to 2.5 million new Class A shares and the company's pivot away from crypto, where revenue dropped 30% last quarter.
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