TradeStation Going Public With SPAC Merger: What Investors Should Know

Trading platform company TradeStation Group announced a SPAC merger Thursday that could help grow the company’s brand awareness, customer accounts and revenue.

The SPAC Merger: TradeStation announced a merger with Quantum FinTech Acquisition Corp QFTA.

The deal values the company at a pro forma enterprise value of $1.43 billion.

PIPE investors include Monex Group MNXBF, Galaxy Digital Holdings Ltd BRPHF, XBTO Ventures and Appian Way Asset Management. Monex Group is the parent company of TradeStation and will own around 80% after the merger.

TradeStation plans to trade on the NYSE with the ticker TRDE.

Public QFTA shareholders will own 12.6% of the company after the merger.

About TradeStation: Offering online brokerage and investment education, TradeStation has more than 145,000 accounts, as of March 31. The company offers trading of stocks, ETFs, options, futures and cryptocurrency.

TradeStation has more than $10 billion in customer assets, according to its presentation.

“Throughout TradeStation’s history, we have grown by providing our clients with a multi-asset trading platform, innovative new products and rich educational content that builds confidence among seasoned and first-time investors alike,” TradeStation CEO John Bartleman said.

Related Link: November SPAC Merger Calendar: Upcoming Votes, Earnings, Stocks To Watch

Growth Ahead: The company said it is seeking to build brand awareness of its online multi-asset trading platform.

Proceeds from the transaction are expected to go towards marketing, product development and IT spending.

TradeStation offers trading of Bitcoin BTC/USD, Bitcoin Cash BCH/USD, Ethereum ETH/USD, Litecoin LTC/USD and USD Coin USDC/USD.

The company plans to offer additional cryptocurrencies in the future and expand its crypto trading support to non-U.S. accounts.

Financials: TradeStation had revenue of $189 million in fiscal 2020. The company is guiding for fiscal 2021 revenue to hit $219 million.

The company sees revenue growing at a compounded annual growth rate of 33% from fiscal 2021 to fiscal 2024 with estimates of $219 million and $349 million for 2022 and 2023 respectively.

QFTA Price Action: QFTA shares were up 1.32% to $9.96 on Thursday at market close. Shares hit a new high of $10.22 earlier in the day.

Photo: Fabian Irsara via Unsplash