eToro to Buy TradeZero for $231M, Stock Drops 10%
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- eToro agreed to acquire TradeZero for up to $231 million in cash and up to 2.5 million newly issued Class A common shares, with the deal expected to close in the first half of 2027.
- TradeZero, founded in 2015, runs commission-free US stock and options trading through its broker-dealer subsidiaries and generated about $80 million in revenue with 81% gross margins over the last twelve months.
- eToro stock (ETOR) slid more than 10% on Tuesday to a low of $30.11, a roughly 10.5% daily drop, even as the company posted Q2 EPS of $0.68 against a $0.61 consensus.
- eToro's US crypto lineup remains narrow after a 2021 SEC settlement limits American users to Bitcoin, Ethereum and Bitcoin Cash, with a 180-day window to offload other tokens.
- Crypto revenue at eToro fell about 30% in Q2, while funded accounts grew 18% year-over-year to 4.28 million and net contribution hit $229 million.
- Yoni Assia, eToro co-founder and CEO, called the purchase "a faster path to launching new products for US customers" and a step toward building a "global financial superapp."
Why it matters: eToro is buying its way into the US equities market where Robinhood dominates, but the market reacted by dumping shares 10% despite an EPS beat — partly because crypto revenue fell 30% and the company is funding the deal with up to 2.5 million new shares. The acquisition gives eToro the broker-dealer rails it has lacked, but closes in H1 2027 and does nothing to fix its US crypto shelf, still capped at three tokens by a 2021 SEC settlement.
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