In a bold move shaking up the fintech world, eToro has priced its IPO at $52 per share above its target range to raise $620 million. Shares will begin trading on Nasdaq on May 14 under the ticker ETOR, challenging rivals like Robinhood. The Israel-based platform’s successful pricing signals strong investor appetite for social trading and crypto ventures.
Breaking Down the Numbers
eToro and its shareholders sold 11.92 million shares, doubling its initial $500 million goal. Originally aiming for $46–$50 per share, the firm secured $52, reflecting a 20% premium. Approximately 5.96 million shares came from eToro itself, netting $310 million for expansion, while existing stakeholders sold the rest. Underwriters retain a 30-day option to buy 1.78 million additional shares, potentially boosting the total raise. The IPO values eToro between $4.2 billion and $4.5 billion, a stark drop from its 2021 $10.4 billion SPAC ambition but a recovery from its 2023 $3.5 billion valuation. Heavyweights like Goldman Sachs and BlackRock backed the offering, with the latter pledging $100 million.
eToro Takes On Robinhood
eToro enters public markets as Robinhood’s stock nears all-time highs, closing at $62 on May 13. Unlike Robinhood, eToro emphasises social features like CopyTrader, letting users mimic expert strategies. With 38 million registered accounts globally, eToro’s niche lies in blending crypto and stock trading, a contrast to Robinhood’s U.S.-centric model. Digital bank Chime filed for its own Nasdaq listing, potentially eyeing $1 billion. Crypto exchange Kraken and stablecoin issuer Circle also plan IPOs, though Circle paused efforts amid market turbulence.
How eToro Turned Profits Into Momentum
eToro’s 2024 net income skyrocketed to $192.4 million, a thirteenfold jump from $15.3 million in 2023. Revenue hit $12.64 billion, fuelled by crypto trading, which tripled to $12 million. User growth played a key role: funded accounts surged to 3.5 million in 2024 from 1.2 million in 2020. However, risks loom. Market volatility and regulatory hurdles like its 2024 SEC settlement limiting U.S. crypto offerings could disrupt growth. Still, global licenses in the EU and New York offer expansion avenues.
Also read: Tether Invests $459 Million in Bitcoin to Fuel Twenty One Capital’s Growth
eToro’s Compliance Challenges
In September 2024, eToro paid $1.5 million to settle SEC charges over unregistered brokerage activities, restricting U.S. crypto trades to Bitcoin, Ethereum, and Bitcoin Cash. Despite this, the firm secured an EU MiCA license and a New York trust charter, balancing constraints with strategic wins. Other crypto firms face similar struggles. BitGo, prepping for a 2025 IPO, recently launched an OTC trading desk. Furthermore, Trump-era tariff policies delayed Circle’s listing, showing how geopolitics sway fintech launches.
What’s Next for eToro and Fintech?
eToro plans to channel IPO funds into AI-driven portfolios, its debit card service, and global outreach. Analysts view its debut as a litmus test for crypto-linked stocks amid shifting regulations. The offering’s 10x oversubscription hints at market confidence, yet skeptics note reliance on volatile assets. For now, eToro’s blend of social trading and crypto agility positions it uniquely. As fintech IPOs rebound, all eyes will track whether eToro mirrors Coinbase’s 2021 success or Robinhood’s rocky post-IPO journey.
A New Chapter in Social Trading
eToro’s Nasdaq debut marks a milestone for retail investing, merging community-driven features with crypto innovation. While regulatory and market risks persist, the $620 million raise shows faith in its model. Whether it becomes a fintech titan or cautionary tale hinges on navigating volatility and outsmarting rivals in a rapidly evolving arena.
Written By Fazal Ul Vahab C H
