Co-founder says eToro IPO is a testament to market recovery as it aims to become a go-to investment app

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Co-founder says eToro IPO is a testament to market recovery as it aims to become a go-to investment app

Newly public eToro is now trading successfully on its own platform.

Its stock saw sizzling action after its Wednesday debut on the Nasdaq. Shares of eToro opened at $69.69, 34% above the IPO pricing. The stock finished the session up 29% at $67, giving the company a market cap of $5.4 billion.

Shares fell about 3% on Thursday. The company’s ticker page remained among the most active on the Yahoo Finance platform.

“I do think obviously markets have come a long way since ‘Liberation Day.’ That’s not related to only eToro. But you know, we’ve seen a lot of great engagement and feedback from investors. The roadshow for us was an amazing experience,” eToro co-founder and CEO Yoni Assia told me on Yahoo Finance today.

The company priced its IPO late Tuesday at $52 a share, above the planned range of $46 to $50. It raised about $310 million in the offering by selling six million shares.

The ***** valued eToro at $4.2 billion. The business had targeted a $4 billion valuation on its IPO roadshow. Rival Robinhood (HOOD) — which has made a series of acquisitions the past two years to become a budding asset manager — has a market cap of $51 billion.

EToro was co-founded in 2007 in Israel by Yoni and his older brother, Ronen Assia. Yoni has said the company was started in his parents’ garage on a big internet server. Ronen sits on the management team and is an executive director.

The company grew quickly from its inception as new investors entered a bull market, initially raising $1.5 million at a $5 million valuation. It launched bitcoin trading in 2013, around the time of the crypto winter that depressed digital asset values.

The team behind eToro has eyed public markets before but opted not to pull the trigger. It was slated to go public through a special-purpose acquisition company (SPAC) in 2022, which would have valued the business at $10.4 billion. The deal fell apart amid more government scrutiny on the once-popular SPAC IPO process.

It then raised $250 million in 2023 at a valuation of $3.5 billion.

Just last month, it delayed investor presentations for its IPO amid heightened market volatility tied to the Trump administration’s trade war.

Today, eToro boasts 40 million registered users spanning 75 countries.

Financial results in the first quarter were mixed. Profits were hampered by investments to capture new clients with markets at elevated levels prior to President Trump’s “Liberation Day.”

Per eToro’s prospectus for the quarter ended March 31:

Funded accounts: +14% year over year to 3.58 million

Adjusted EBITDA: $76 million to $80 million, down 10% at the midpoints

The company earned 43% of its trading commissions from stock trading and 37% from crypto

Story Continues

Yoni Assia says he has big growth ambitions.

“We are in 12 different regions, including the US. We have offices in Europe, ***, Australia, Singapore, UAE, and are very excited about the path of growing our business now entering into savings and wealth management, and retirement as well in two of our markets, both Australia and the ***. We think the opportunity is very, very big to eventually become the investment apps of our younger generations,” Assia explained.

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#Cofounder #eToro #IPO #testament #market #recovery #aims #goto #investment #app

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