Shares of eToro, a stock brokerage platform, surged on their debut on the Nasdaq on Wednesday, following a successful initial public offering (IPO) that raised nearly $310 million.
The stock commenced trading at $69.69, reflecting a 34% increase from its IPO price, which elevated the company’s market capitalization to approximately $5.6 billion. By the latest reports, shares had climbed over 40%.
Headquartered in Israel, eToro sold close to six million shares at $52 each, exceeding the anticipated price range of $46 to $50. Additionally, existing investors contributed nearly six million more shares. At the IPO price, the firm was valued at around $4.2 billion.
Market analysts are observing eToro closely, hoping it will signal a resurgence in interest for IPOs following a prolonged downturn. The previous political landscape, particularly the potential return of former President Donald Trump, was seen as a possible motivator for companies looking to go public before trade tariff concerns caused many to postpone their plans.
EToro isn’t the only firm exploring public options; fintech company Chime submitted its prospectus to the U.S. Securities and Exchange Commission on Tuesday. Meanwhile, Hinge Health, a digital physical therapy startup, has initiated its IPO roadshow with intentions to raise up to $437 million.
eToro initially aimed for a public listing in 2021 through a merger with a special purpose acquisition company (SPAC), which would have valued the company at over $10 billion. However, plans were scrapped in 2022 due to a downturn in equity markets, although eToro remained determined to pursue a public offering eventually.
Founded in 2007 by brothers Yoni and Ronen Assia along with David Ring, eToro generates revenue through trading fees and various non-trading activities, including withdrawal fees. The company reported a dramatic increase in net income last year, rising nearly thirteenfold to $192.4 million, up from $15.3 million in 2023.
eToro has also expanded its presence in the cryptocurrency market, with revenues from crypto assets exceeding $12 million in 2024, marking a threefold increase from the previous year. Notably, one-quarter of eToro’s net trading revenue was derived from cryptocurrencies last year, compared to just 10% in 2023.
The firm anticipates that for the first quarter, crypto assets will represent 37% of its trading commissions, a decrease from 43% during the same period last year.
Following the IPO, Spark Capital emerges as eToro’s largest external investor, retaining a 14% stake in the company, while BRM Group holds 8.7%. CEO Yoni Assia maintains a 9.3% ownership stake.
