eToro has announced plans to acquire US brokerage TradeZero for up to 231 million dollars in cash and newly issued shares, marking a strategic push into American equities markets. The deal was disclosed alongside second quarter results showing net contribution rising nine percent year on year to 229 million dollars and net income reaching 53.5 million dollars. TradeZero generated approximately 80 million dollars in revenue over the twelve months ending June, putting the acquisition price at roughly 2.9 times revenue.
Founded in 2015, TradeZero operates an equities and options platform targeting active traders across the United States, Canada and international markets. The Canadian operation received dealer membership from the national investment regulator in early 2022. However, the firm carries regulatory baggage from the meme stock era, having settled with the SEC in May 2022 over trading restriction disclosures from January 2021, paying 100,000 dollars without admitting wrongdoing.
The acquisition reflects growing importance of equities to eToro’s business model, with net trading income from equities, commodities and currencies climbing 27.6 million dollars year on year to 141.6 million dollars. However, sequential momentum weakened considerably, with second quarter net contribution falling eleven percent from the first quarter’s 258 million dollars, while July assets under administration dropped five percent below year earlier levels.
FXnCO Insight
This acquisition demonstrates how multi asset platforms are prioritizing US equities growth despite carrying regulatory risk through legacy enforcement actions that require thorough due diligence integration.
Source: Finance Magnates