The banking and investing app MoneyLion (ML) is set to merge with SPAC Fusion Acquisition (FUSE). The merger deal announced in February 2021 is about to close. What's MoneyLion’s stock forecast, and will it go up after the merger?
As part of the deal, MoneyLion is set to receive up to $600 million in gross cash proceeds, including $250 million in PIPE investment at $10 per share. BlackRock and Apollo Global Management participated as PIPE investors.
The MoneyLion and FUSE merger date
The special meeting of FUSE shareholders is scheduled to be held on Sept. 21 at 9:00 a.m. ET to approve the business combination. The transaction is expected to close on the following day. On Sept. 23, the combined entity will trade under a new ticker symbol “ML” on the NYSE.
Will FUSE stockholders approve the merger?
FUSE shareholders are expected to approve the merger based on the combined company’s strong growth prospects. MoneyLion provides mobile banking, lending, and investment services. In the second quarter, the company’s revenue grew by 122 percent YoY to $37.7 million. MoneyLion’s customer base also increased by 113 percent YoY to 2.2 million.
MoneyLion anticipates significant sequential growth in the second half of 2021 based on the company’s YTD performance and in anticipation of more momentum as the company launches several new products and growth initiatives to market.
The SPAC redemptions are rising. As a result, PIPE financing becomes critical for closing transactions. About 70 percent–80 percent of FUSE SPAC’s public shares are expected to be redeemed.
MoneyLion stock forecast
Since none of the analysts cover MoneyLion stock, we have to rely on the forecasts provided by the company. MoneyLion has projected revenues of $525 million in 2023, while it expects to post an adjusted net income of $20 million that year. Based on the current stock price, the EV is about $2.3 billion. This would give us a 2023 EV-to-sales multiple of 4.4x. In absolute terms, the company has an equity value of about $2.8 billion.
MoneyLion versus SoFi
Since MoneyLion competes with SoFi, there are bound to be comparisons between the two. Currently, MoneyLion has over 2.2 million users and expects to reach 9.0 million users by the end of 2023. In 2021, the company expects to generate sales of $155 million. Also, MoneyLion expects its sales to grow by 83.9 percent in 2022 and 84.2 percent in 2023. The company expects to report a total payment volume of $1.5 billion in 2021, $3.7 billion in 2022, and $5.6 billion in 2023.
On June 1, SoFi went public by merging with a blank-check company backed by Chamath Palihapitiya. The merger deal valued SoFi at an equity value of $8.65 billion. Currently, SoFi has over 2.6 million users and is on track to reach 3 million users by the end of this year. In 2021, the company expects to generate sales of $980 million. Also, SoFi expects its sales to grow by 53 percent in 2022 and 40.4 percent in 2023. The company expects to achieve a positive net profit by 2023.
Will MoneyLion stock go up after the merger?
MoneyLion stock might experience the same post-merger blues that other high-growth companies have witnessed after going public through SPAC deals. SoFi stock is down 35 percent over the last three months.
MoneyLion’s medium and long-term outlook seems bright. The company thinks that the upcoming launch of a new cryptocurrency trading and so-called "Buy Now Pay Later" platform later this year will drive user growth and revenue. Also, MoneyLion estimates that its current revenue opportunity is worth over $250 billion.