JAKARTA - Webull, a digital brokerage company that offers stock trading services, options, ETF, and crypto, plans to go public through a merger with a special purpose acquisition company (SPAC) called SK Growth Opportunities Corp. This move was taken after Webull had difficulty carrying out traditional public offerings (IPOs) in the United States due to crypto-related regulatory constraints.
Webull, founded in 2017, has about 20 million registered users in more than 15 countries, including the US, Canada, UK, Australia, and India. The company claims to have a notional volume of equity worth US$370 billion (around Rp5,300 trillion) in 2023, up 160% from the previous year. Webulls have also offered crypto trading since 2020, in support of more than 20 digital assets, including Bitcoin, Ethereum, Dogecoin, and Cardano.
Even so, Webull faces the obstacle to listing its shares on the Nasdaq stock exchange through traditional IPOs due to regulatory uncertainty from the US Securities and Exchange Commission (SEC) regarding crypto. The group president and CEO of Webull, Anthony Denier, said that the SEC has not provided clear guidelines on how broker dealers are registered to operate in the crypto ecosystem, quoted from Coingape.
"We've been trying to do an IPO for the last two years, but we're constantly facing obstacles. One of the main reasons is [related] to our crypto offering," Denier said in an interview with X.
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As a result, Webull decided to sell its digital asset business and discontinue crypto services in the third quarter of 2023. Denier said that this step was taken to meet SEC requirements and avoid legal risks.
"We don't want to take risks with the SEC. We don't want to be a law enforcement target. We don't want to be a bad example for the industry," Denier said.
Webull then looks for other alternatives to go public, namely through a merger with SPAC. SPAC is a company formed with the aim of acquiring or joining other companies and bringing them to the public market. SPAC is usually faster and more flexible than traditional IPOs.
Webull has confirmed its agreement with SK Growth Opportunities, a SPAC backed by the SK Group, a South Korean conglomerate engaged in energy, telecommunications, and technology. This agreement will provide a webull valuation of pro-forma companies of around 7.3 billion US dollars (approximately IDR 104.4 trillion). In addition, Webull is expected to attract 100 million US dollars (approximately IDR 1.4 trillion) from institutional investors through private stock offerings (PIPE).
"We chose SPAC because we can negotiate a pre-emptive valuation, not at the end of the process. We can also avoid market volatility and regulatory uncertainty that could affect traditional IPOs," Denier said.
Webull hopes to complete the merger with SK Growth Opportunities in the second half of this year and own its shares traded on Nasdaq with the ticker symbol WBUL. However, this deal still has to be approved by shareholders of both the company and regulators.
Webull also plans to re-launch crypto services in the future, following the development of market regulations and demand. Denier said that Webull still believes in crypto potential as an investment asset and technological innovation.
We are not leaving crypto forever. We are only temporarily delaying until we get clarity from the SEC. We still see crypto as an important part of our business and we want to give our customers the best choice," said Denier.
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