eToro Group agreed to buy TradeZero, a U.S.-focused online brokerage for active traders, for up to $231 million in cash plus up to 2.5 million newly issued Class A shares, the Nasdaq-listed company said in a release filed with the U.S. Securities and Exchange Commission on Tuesday.
The purchase buys eToro regulated brokerage plumbing in two markets it wants to grow in. TradeZero Holding Corp. owns TradeZero America, a U.S. broker-dealer that has served U.S. clients since 2019, along with entities in the Bahamas, Canada and the Netherlands. Through those subsidiaries it offers commission-free stock trading, U.S. equities and equity options, and a proprietary short locator for traders borrowing hard-to-find shares.
eToro said TradeZero generated roughly $80 million in revenue in the twelve months ended June 30, with 81% gross margins in the second quarter, and that the deal should add to adjusted earnings per share in its first year after completion. Those figures and the accretion forecast are eToro's own disclosures rather than independently audited numbers, and the version of the release published on eToro's website applies the 81% margin to the full twelve months instead of the quarter.
