425: Webull to Go Public Through Merger with SK Growth Opportunities Corp in $7.3 Billion Deal

Webull Corporation, a digital investment platform, plans to list publicly via a business combination with SK Growth Opportunities Corporation, valuing the combined entity at approximately $7.3 billion.

Summary

• Webull Corporation, a digital investment platform, has agreed to a business combination with SK Growth Opportunities Corporation (SK Growth), a special purpose acquisition company (SPAC).
• The transaction values the combined company at an implied pro forma enterprise value of approximately $7.3 billion.
• Webull shareholders will roll over 100% of their existing equity and are expected to own approximately 98% of the combined company after the transaction, assuming approximately $100 million in gross proceeds from the SPAC trust account.
• The deal is expected to close in the second half of 2024, pending regulatory and shareholder approvals.
• Webull operates in 15 regions globally, has licenses as a broker-dealer in 10 major markets, and has over 20 million registered users.
• In 2023, the Webull platform facilitated approximately $370 billion in equity notional volumes and 430 million options contracts traded.

Sentiment

Score: 8

Explanation: The document presents a positive outlook on Webull's future, highlighting its strengths, growth potential, and the benefits of the merger. The management commentary is optimistic, and the transaction is expected to provide Webull with additional capital and access to public markets.

Positives

• Webull has a large user base of 20 million registered users globally.
• The company operates in 15 regions and is licensed as a broker-dealer in 10 major markets.
• The transaction provides Webull with access to public markets and additional capital.
• Webull has strong industry tailwinds, including increasing retail participation and globalization of retail investing.
• The company has blue-chip institutional backing from investors like General Atlantic and Coatue Management.

Risks

• The transaction is subject to regulatory and shareholder approvals and may not close.
• The number of redemption requests made by SK Growth public shareholders could impact the cash position of the combined company.
• Changes in laws or regulations could adversely affect the company's international operations.
• The company faces intense competition in the digital investment platform industry.
• The company's business is heavily reliant on trading-related income, which can be volatile.
• The company may be subject to regulatory investigations, actions, and settlements.

Future Outlook

The combined company expects to expand its holistic approach to retail investors and bolster growth in existing and new markets as a public company.

Management Comments

• Anquan Wang, Founder and CEO of Webull Corporation: 'The business combination with SK Growth marks a significant milestone for Webull. We believe SK Growths partnership and experience fully aligns with our long-term vision to make Webull the platform of choice for the new generation of investors globally.'
• Anthony Denier, Group President of Webull Corporation: 'Webull addresses critical pain points within the retail investing customer landscape, where traditional providers offer restricted mobile functionality and are suited for investors behind a computer. Webull was created to bridge the gap by providing users with both advanced trading capabilities and robust educational resources. We expect this business combination will enable us to further expand our holistic approach to retail investors.'
• Richard Chin, CEO and Director of SK Growth Opportunities Corporation: 'We are very excited to be joining forces with the Webull team, given their strong track record in the FinTech industry. We are confident that capitalizing on our experience and network globally will bolster Webulls growth in existing and new markets as a public company.'

Industry Context

The announcement reflects the ongoing trend of digital investment platforms seeking growth and capital through public listings, tapping into the increasing retail participation and globalization of investing.

Comparison to Industry Standards

• Webull's 20 million registered users and $370 billion in equity notional volumes place it among the leading digital investment platforms.
• Comparable companies include Robinhood, which also caters to retail investors with a focus on mobile accessibility and commission-free trading.
• Webull's global presence in 15 regions distinguishes it from some competitors with a more localized focus.
• The $7.3 billion enterprise value is a significant valuation in the FinTech space, reflecting investor confidence in Webull's growth potential.

Stakeholder Impact

• Shareholders of SK Growth will have the opportunity to exchange their shares for equity in the Combined Company.
• Webull's customers will benefit from the company's enhanced financial position and ability to expand its services.
• Employees of Webull may see new opportunities for growth and development as the company expands.
• The transaction could create new opportunities for Webull's business partners and suppliers.

Next Steps

• File the Registration Statement with the SEC.
• Obtain regulatory and shareholder approvals.
• Close the transaction, expected in the second half of 2024.
• List the Combined Company's ordinary shares on NASDAQ under a new ticker symbol.

Key Dates