Over the weekend, the Bloomberg website reported that Israeli online trading platform eToro was considering an IPO in New York and had hired investment bank Goldman Sachs to do so. Sources told the Globes that the company is aiming for a valuation of $5 billion.
This is not the first time eToro has attempted to enter the stock exchange. In the boom year of 2021, the company dreamed of a SPAC merger at a valuation of $10.4 billion, but that dream disappeared as the capital markets cooled.
In March this year, it was reported that eToro is preparing for flotation after raising capital at a valuation of $3.5 billion in 2023. The revised valuation is based on expected earnings growth. eToro posted a loss of more than $40 million last year, but had EBITDA of $107 million. The company now expects to post even larger profits this year, which should help it attract investors for the flotation planned for Q2 2025.
There was no comment from eToro, but in an article about the previous flotation attempt in March, company founder and CEO Yoni Assia told the Financial Times: told. At an all-time high, participation in stock trading has increased significantly. ”
eToro is receiving a boost from the crypto market, which is coming off an incredible year. Last week, the price of Bitcoin exceeded $100,000 for the first time. Although it has since declined slightly, year-to-date, the leading cryptocurrency has returned more than 125%.
eToro and Goldman Sachs have been impressed by the rise in stock prices of trading platforms such as Coinbase, which have benefited from the rise in cryptocurrencies. Coinbase stock is up 119% so far this year, while Robinhood stock is up 237%. eToro’s main competitor, Robinhood, trades at 55 times EBITDA. If eToro were trading at the same multiple today, it would have a market cap of nearly $6 billion based on last year’s EBITDA.
eToro’s sales of $630 million last year were lower than its 2022 sales of $631 million and nearly half of its 2021 sales of $1.2 billion. Still, the company is encouraged by improved profitability, is in talks with the U.S. Securities and Exchange Commission for permission to facilitate trading of cryptocurrencies on its platform, and plans to expand its product portfolio of ETFs and mutual funds. and may even offer a pension plan. eToro recently acquired Spaceship, an Australian company that provides a pension investment management app, for A$80 million. ($51 million), in partnership with a British pension fund.
Related articles
eToro considers downsizing Wall Street IPO
eToro stock is on sale at a $1.7 billion valuation
eToro agrees to sell secondary shares for $120 million
eToro raises $250 million at $3.5 billion valuation
“Trump’s arrival in the White House and the appointment of Paul Atkins, who has served as a consultant to several crypto companies, as SEC Chairman signals that the US market is moving in a more liberal direction as far as regulation is concerned. ” said Adam Benayoun, founding partner of Collider Ventures, which invests in cryptocurrencies and blockchain companies. “Next year will see more permissive policies regarding mergers and acquisitions, increasing activity in that area, and many companies are warming up to the starting line to emerge. SEC Chairman has a history of advising crypto companies, including Circle, Fireblocks, and eToro, which have been waiting to float for several years and are now getting ready.
Published by Globes, Israel Business News – en.globes.co.il – on December 9, 2024.
© Globes Publisher Itonut (1983) Ltd., Copyright 2024.
