The stock
market debut of ThinkMarkets is now in question after the Canada-listed blank
check company, FG Acquisition Corp., withdrew its preliminary prospectus.
Although the firm assures that it will reapply its reverse merger deal, the
retail FX/CFD market has already seen many stories of failed public offerings.
Think
Financial Group Holdings Limited, the operator of the ThinkMarkets brand,
officially announced in May of this year that it would merge with a Special
Purpose Acquisition Company (SPAC) to debut on the Canadian TSX stock exchange.
According
to the information at the time, the debut was set to take place in July 2023.
By June, it seemed that everything was heading in the right direction. At the
end of the month, SPAC partner shareholders accepted the acquisition of
ThinkMarkets, and meanwhile, the broker introduced a copy trading app to its
offerings, preparing for the listing.
However,
three months have passed since the announced date, and ThinkMarkets is still
not a publicly traded company.
This week,
FG Acquisition Corp. announced the withdrawal of the preliminary non-offering
prospectus, officially filed on 12 May 2023. The company assures that it
intends to continue working with Think Financial to finalize the agreement.
However, it has failed to submit the final prospectus within the statutory 180
days and will need to submit a preliminary prospectus again.
“As
such, the Corporation is withdrawing the Prospectus and intends to re-file a
new Prospectus as soon as it is able, which will contain details of the
Qualifying Acquisition, and continue pursuing the Qualifying Acquisition with
Think Financial,” commented FG Acquisition Corp. in an official statement.
Two Times a Charm and
Million-Dollar Losses in the Background
For Think
Financial, this would not be the first unsuccessful announcement of going
public. In 2020, Finance Magnates reported that ThinkMarkets planned a
$300 million initial public offering (IPO) in Australia.
The company
wanted to raise an additional $100 million in funding, but the project died at
the preliminary announcement stage.
In the
background of the postponed IPO, ThinkMarkets’ results for 2022 came to light.
For example, the British subsidiary TF Global Markets (UK) Limited achieved
higher revenues, but its operating profit fell by 7%.
The
company’s million-dollar losses were also shown in the preliminary prospectus
published in May, which showed that over two years from 2021, ThinkMarkets lost
nearly $21 million.
12 Years of IPO Promises
Based on
current information, we should assume that the planned TSX debut will
eventually occur. However, if this did not happen, no one in the industry would
be surprised.
The last
few decades of plans by various brokers and retail companies in the FX/CFD
sector have shown that very often, becoming a public company ends only in
announcements.
The list of
publicly traded firms is relatively short and includes only CMC Markets, IG
Group, Plus500, Interactive Brokers, Swissquote, Naga Markets, and XTB. The
last successful debut occurred in 2016 when XTB entered the Warsaw Stock
Exchange.
In 2020, eToro announced its intention to sign an SPAC deal, but to
this day, it has not been finalized. However, the list of uncompleted IPOs and
SPAC deals is much longer.
According
to Andrew Saks, the Head of Media & Analysis at ETX Capital, there could be
two reasons for the small numbers of exchange -listed FX brokers: “It is
impossible to go public if a broker hosts its client base on third party
servers and given that around 85% of the brokers in the retail market do that,
this is a large barrier.”
In
contrast, others do not want to share their financial details. “For
example, in the United States, publicly listed firms have to state in their
quarterly and annual reports how they conduct their business, whether they use
an A book or B book method, and the internal handling of order flow may not be
something many firms want to disclose publicly,” Saks added.
The stock
market debut of ThinkMarkets is now in question after the Canada-listed blank
check company, FG Acquisition Corp., withdrew its preliminary prospectus.
Although the firm assures that it will reapply its reverse merger deal, the
retail FX/CFD market has already seen many stories of failed public offerings.
Think
Financial Group Holdings Limited, the operator of the ThinkMarkets brand,
officially announced in May of this year that it would merge with a Special
Purpose Acquisition Company (SPAC) to debut on the Canadian TSX stock exchange.
According
to the information at the time, the debut was set to take place in July 2023.
By June, it seemed that everything was heading in the right direction. At the
end of the month, SPAC partner shareholders accepted the acquisition of
ThinkMarkets, and meanwhile, the broker introduced a copy trading app to its
offerings, preparing for the listing.
However,
three months have passed since the announced date, and ThinkMarkets is still
not a publicly traded company.
This week,
FG Acquisition Corp. announced the withdrawal of the preliminary non-offering
prospectus, officially filed on 12 May 2023. The company assures that it
intends to continue working with Think Financial to finalize the agreement.
However, it has failed to submit the final prospectus within the statutory 180
days and will need to submit a preliminary prospectus again.
“As
such, the Corporation is withdrawing the Prospectus and intends to re-file a
new Prospectus as soon as it is able, which will contain details of the
Qualifying Acquisition, and continue pursuing the Qualifying Acquisition with
Think Financial,” commented FG Acquisition Corp. in an official statement.
Two Times a Charm and
Million-Dollar Losses in the Background
For Think
Financial, this would not be the first unsuccessful announcement of going
public. In 2020, Finance Magnates reported that ThinkMarkets planned a
$300 million initial public offering (IPO) in Australia.
The company
wanted to raise an additional $100 million in funding, but the project died at
the preliminary announcement stage.
In the
background of the postponed IPO, ThinkMarkets’ results for 2022 came to light.
For example, the British subsidiary TF Global Markets (UK) Limited achieved
higher revenues, but its operating profit fell by 7%.
The
company’s million-dollar losses were also shown in the preliminary prospectus
published in May, which showed that over two years from 2021, ThinkMarkets lost
nearly $21 million.
12 Years of IPO Promises
Based on
current information, we should assume that the planned TSX debut will
eventually occur. However, if this did not happen, no one in the industry would
be surprised.
The last
few decades of plans by various brokers and retail companies in the FX/CFD
sector have shown that very often, becoming a public company ends only in
announcements.
The list of
publicly traded firms is relatively short and includes only CMC Markets, IG
Group, Plus500, Interactive Brokers, Swissquote, Naga Markets, and XTB. The
last successful debut occurred in 2016 when XTB entered the Warsaw Stock
Exchange.
In 2020, eToro announced its intention to sign an SPAC deal, but to
this day, it has not been finalized. However, the list of uncompleted IPOs and
SPAC deals is much longer.
According
to Andrew Saks, the Head of Media & Analysis at ETX Capital, there could be
two reasons for the small numbers of exchange -listed FX brokers: “It is
impossible to go public if a broker hosts its client base on third party
servers and given that around 85% of the brokers in the retail market do that,
this is a large barrier.”
In
contrast, others do not want to share their financial details. “For
example, in the United States, publicly listed firms have to state in their
quarterly and annual reports how they conduct their business, whether they use
an A book or B book method, and the internal handling of order flow may not be
something many firms want to disclose publicly,” Saks added.
