Webull's IPO is proceeding independently, with the digital brokerage now aiming to go public through a merger with a special acquisition purpose company (SPAC) called SK Growth Opportunities Corp.
Webull IPO: SEC uncertainty
Webull has confirmed that it has entered into an agreement with SK Growth Opportunities to list its shares on the Nasdaq Stock Exchange. As a result, the joint venture will have an estimated enterprise value of approximately $7.3 billion. In the long term, the SPAC deal with SK Growth Opportunities is expected to bring up to $100 million into the ecosystem.
Notably, Webull currently has an estimated 20 million registered users in over 15 countries around the world. The company also has notional principal amount worth $370 billion, according to a statement released. Webull agreed to this merger strategy after several attempts to go public in the United States through an initial public offering (IPO) were thwarted by online brokerages that offer cryptocurrencies to users.
Anthony Denier, Webull's group president and US CEO, explained that the failure of this attempt was due to several reasons, including the company's recent crypto exposure. In the opinion of the naysayers, US SEC has been very unfriendly to crypto projects.
Webull overwhelmed by regulatory challenges
When Webull introduced crypto trading on its platform in 2020, Denier withdrew his plans.
Cryptocurrency listings have shown great performance, gaining significant market share from top competitors such as: Robinhood Markets Co., Ltd.. However, in the third quarter of the same year, the company withdrew this encryption service. The company sold its digital assets business and also removed its crypto products from its platforms around the world.
Naysayers said the move was prompted by overwhelming pressure Regulatory challenges with the authorities. Specifically, Webull was unsure how the agency expected registered broker-dealers to operate within the blossoming cryptocurrency ecosystem.
The decision to choose a SPAC transaction over a traditional IPO was carefully considered by the online brokerage. For Denier, this “allows us to come to an agreement with the SPAC in terms of valuing it up front, rather than valuing it at the end of the process.”
Weeble plans to have its shares traded on the Nasdaq by the second half of this year, but the deal must be completed by September before that, as a deadline extension may no longer be possible.
