eToro, the Israel-based stock brokerage platform, made a strong debut on the Nasdaq on Wednesday, with shares surging nearly 29% to close at $67 after pricing its initial public offering (IPO) above the expected range. The company raised almost $310 million in its IPO, marking a significant milestone in its journey to becoming a publicly traded entity.
Strong Market Debut Reflects Investor Confidence
The stock opened at $69.69, representing a 34% jump from its IPO price of $52 per share, which was higher than the anticipated range of $46 to $50. At the closing price, eToro’s market capitalization exceeded $5.4 billion, underscoring robust investor appetite for the company’s shares.
Assia highlighted that the company waited for stabilization in market volatility, as measured by the CBOE Volatility Index, following concerns over tariffs that had previously dampened IPO activity.
Wall Street is closely watching eToro’s performance as a potential indicator of renewed interest in IPOs after a prolonged drought. Many companies delayed their plans amid economic uncertainties, but Donald Trump’s return to the White House initially sparked optimism before tariff concerns emerged.
A Long-Awaited Public Listing
This IPO marks eToro’s second attempt at going public. The company had initially filed for a SPAC merger in 2021, which would have valued it at over $10 billion. However, those plans were shelved in 2022 due to volatile equity markets. Despite the delay, eToro remained committed to pursuing an eventual IPO, and its successful debut reflects its perseverance and strategic timing.
Founded in 2007 by brothers Yoni and Ronen Assia and David Ring, eToro has grown into a leading player in the online trading space. The company generates revenue through trading-related fees and non-trading activities such as withdrawals. Last year, its net income skyrocketed almost thirteenfold, reaching $192.4 million from just $15.3 million in 2023.
Cryptocurrency Growth Fuels Revenue
Cryptocurrencies have become a significant driver of eToro’s business. In 2024, revenue from crypto assets more than tripled to over $12 million, accounting for one-quarter of the company’s net trading contribution last year—up from 10% in 2023.
However, eToro noted that while crypto remains a key focus, its contribution to trading commissions is expected to decline slightly. For the first quarter of 2024, crypto assets are projected to account for 37% of trading commissions, down from 43% a year earlier.
This shift highlights eToro’s efforts to diversify its revenue streams beyond cryptocurrencies, ensuring sustainable growth as market dynamics evolve.
Ownership Structure After IPO
Following the IPO, Spark Capital remains eToro’s largest outside investor, holding 14% of the company. BRM Group follows with 8.7%, while CEO Yoni Assia retains control of 9.3% of the shares. The offering included nearly six million newly issued shares, with an additional six million shares sold by existing investors, further boosting liquidity and broadening ownership.
Broader Trends in the IPO Market
eToro’s successful debut comes amid a resurgence in IPO activity. Other companies are also testing the waters, signaling renewed confidence in public markets. Fintech giant Chime filed its prospectus with the U.S. Securities and Exchange Commission (SEC) this week, while digital physical therapy provider Hinge Health launched its IPO roadshow, aiming to raise up to $437 million.
These developments suggest that companies are increasingly optimistic about market conditions, despite lingering concerns over tariffs and global economic uncertainty.
