Israel-based eToro, an online trading platform, announced an IPO target price of $52/share. It’s getting ready to trade on the Nasdaq under the symbol ETOR. Brothers Yoni and Ronen Assia, along with David Ring built the company in 2007. They have already done a miraculous job making it seem like a clear competitor or alternative to popular trading platforms like Robinhood.
Through the IPO, eToro intends to issue and sell about 6 million shares, giving the company a pro-forma valuation of about $4.2 billion. The multibillion dollar offering is projected to raise just under $310 million. This will further bolster the company’s financial foundation as they strive to grow their foothold into the market. Current investors and insiders are joining the offering with the sale of an additional 5 million shares.
Goldman Sachs, Jefferies, and UBS Securities LLC are serving as underwriters for eToro’s transaction. Their strong backing will lead to a strong launchpad for the trading platform once it hits the public market.
eToro’s revenue model is multi-faceted, with the majority of its revenue coming from trading fees—particularly spreads on buy and sell orders. In addition, it generates revenue from non trading activities like withdrawal and currency conversion. Especially since the firm’s revenue from cryptoassets has increased tremendously, more than tripling to above $12 million in 2024. Previously, last year eToro’s net trading contribution from cryptocurrency surged to one-fourth. That’s a huge jump up from just 10% last year.
From a financial performance perspective, the company has had a meteoric rise. Net income rocketed nearly 13 times last year to an incredible $192.4 million, compared to only $15.3 million the previous year. This skyrocketing represents eToro’s adept maneuvering in the fast-changing trading environment.
Last year, eToro planned to answer a SPAC merger and go public. Then, they changed course and decided to abandon those plans altogether. eToro CEO Yoni Assia reassured that the company is committed to public markets. Now they’re just waiting for “the right opportunity.”
“We definitely are eyeing the public markets,” – Yoni Assia
Demand for eToro’s IPO goes beyond just regular investors. BlackRock intends to purchase $100 million of shares at the IPO offer price. This relocation demonstrates the burgeoning investor confidence in the trading platform’s long-term potential.
As eToro looks toward its Nasdaq listing, it’s moving to shore up its position in an increasingly competitive field. The company’s smart, inventive strategy and impressive revenue trajectory put it ahead of existing players.
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