eToro, a prominent stocks and cryptocurrency trading platform catering to retail investors, is preparing to make its debut on the New York Stock Exchange. According to a report by the Financial Times, the move comes in light of a confidential filing with the U.S. Securities and Exchange Commission, indicating an upcoming sale of shares to the public.
The anticipated sale could take place as early as the second quarter and is expected to value the company at over $5 billion, as reported by the FT. The platform has enlisted the expertise of financial advisory giants such as Goldman Sachs, Jefferies, and UBS to navigate this pivotal transition.
If the public offering proceeds successfully, eToro would join an exclusive club of publicly traded companies that offer cryptocurrency trading services in the U.S., which currently includes Coinbase (COIN) and Robinhood (HOOD). However, eToro’s market capitalization would be significantly smaller than that of its peers, with Coinbase standing at approximately $69 billion and Robinhood at around $40 billion.
The upcoming valuation would also reflect a considerable decline compared to its previous attempt to go public in 2021, where eToro sought a valuation of $10.4 billion through a merger with a special purpose acquisition company (SPAC). This ambitious plan, however, was abandoned in late 2022 due to adverse market conditions.
In a shift reflecting changing market dynamics, eToro secured $250 million in funding earlier this year at a valuation of $3.5 billion, led by investors such as SoftBank, following a steep decline in its market value. Nevertheless, recent trends indicate that the valuation has rebounded amidst a recovery in both equity and cryptocurrency markets. This surge has been supported by the company’s agreement to settle SEC charges totaling $1.5 million, which stemmed from allegations of operating as an unregistered broker and clearing agency and facilitating trading in cryptocurrency assets classified as securities.
While the exact cryptocurrency trading volume remains undisclosed, reports from Finance Magnates indicated that eToro’s Bitcoin trading volume had surged more than 500% in the year ending November. Founded in Israel in 2007, eToro currently manages approximately $11.3 billion across more than 3 million customers, offering a diverse portfolio that includes cryptocurrencies, stocks, and exchange-traded funds.
In accordance with its settlement with the SEC, eToro had previously agreed to limit cryptocurrency trading for U.S. users to just a few assets, including Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH), thereby narrowing the available trading options significantly.
As we look forward to eToro’s potential public offering, the implications for retail investors and the broader cryptocurrency market could be substantial. The company did not respond to requests for further comments, leaving its next steps shrouded in anticipation.
