It’s been a week of hot initial public offerings (IPOs), and it’s not over yet. We’ve seen impressive launches from Allbirds (NASDAQ:BIRD) and NerdWallet (NASDAQ:NRDS). However, today brought the news that the new SPAC (special purpose acquisition company) boom is continuing as digital securities trading platform TradeStation prepares to go public by merging with Quantum FinTech Acquisition Corp (NYSE:QFTA). This move fits well within the latter’s mission of acquiring a high-growth company within the fintech or financial services sectors. QFTA shares shot up by more than 4% yesterday following the merger announcement. Though they’ve dipped a bit since then, their growth patterns remain steady and in the green. Everyone should be ready for the TradeStation SPAC merger.
This merger has the potential to create a rival for other popular trading platforms. Some have speculated that it could become the next Robinhood (NASDAQ:HOOD). What else should investors know as Wall Street prepares for the TradeStation SPAC merger? Let’s discuss.
What to Know About the TradeStation SPAC Merger
- The newly minted company will trade on the New York Stock Exchange under the symbol “TRDE.” Sources have indicated that the deal is expected to be finalized within the first half of 2022.
- It has been reported that the valuation of the combined companies is roughly $1.43 billion. TradeStation’s reasons for wanting to go public center around expansion — the company has stated that it wants to hire more specialists to expand its research and development initiatives.
- The deal includes a $115 million PIPE (private investment in public equity) investment. Strategic and institutional investors Monex Group and Galaxy Digital have both contributed $50 million.
- When the deal does close, 48% of the shares held by Quantum’s sponsors will be converted to unvested performance-based earn-out shares or, in other cases, will be forfeited. As it stands, the number of shares in both instances will be 798,894 and 1,610,554, respectively.
- Monex is TradeStation’s parent company. It is estimated that it will hold 80% of the company at the deal’s closing. As part of the merger, all shares held by Monex will be subject to a lock-up provision, which will last as long as three years for some.
- Galaxy has indicated that it sees significant potential in TradeStation, particularly as cryptocurrency continues to grow as an investment vehicle.
- TradeStation President and CEO John Bartleman notes that the company’s appeal has expanded beyond its original customer base of seasoned traders. Going public could position it to be the next Robinhood, a company that was highly criticized during its IPO.
- There’s plenty of reason to think that Robinhood should be threatened by the TradeStation SPAC merger. This less controversial trading platform is highly dynamic, offering divisions for trading both securities and cryptos but also resources for analytics and financial education.
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