MW Crypto broker eToro's IPO to test the waters for stock-market newcomers

By Steve Gelsi

Mobile app stock and digital currency company eToro is set to float its IPO after a huge rally in stocks.

Stock and cryptocurrency broker eToro will "test the waters" this week for other potential initial public offerings after the window for stock market newcomers slammed shut last month, analysts said.

Israel- and New Jersey-based eToro plans to offer 10 million shares at an estimated price range of $46 to $50 a share to raise up to $500 million in its IPO under the symbol "ETOR" on the Nasdaq.

The IPO is expected to price Wednesday after the closing bell for trading on Thursday, according to IPOScoop.com.

eToro was one of several "notable" initial public offerings (IPOs) tabled in April as the stock market reeled from tariff uncertainty, according to IPO fund manager Renaissance Capital.

"Now it's the first of the group to test the waters," Renaissance Capital Chief Executive Bill Smith said in a note to clients.

The stock market has turned around in recent weeks, including a huge rally on Monday, as China and the U.S. agreed to sharply reduce tariffs during negotiations.

In another positive sign for the IPO market, CoreWeave Inc. $(CRWV)$ closed at $52.57 a share on Monday for a gain of 31% over its $40 IPO price when it debuted on March 28.

eToro, and last week's successful IPO from specialty insurance company Aspen Insurance Holdings Ltd. $(AHL.AU)$, may not appear to have much in common, but both businesses are resistant to changes in tariffs, Smith said.

Jay Ritter, a finance professor at the University of Florida who specializes in IPOs, said other deals are likely if the eToro IPO generates a solid gain in its debut later this week.

If favorable stock-market conditions continue, some deals that may list their shares for the first time this month include insurer Ategrity Specialty Insurance, advertising-technology company MNTN and medical-technology provider Hinge Health.

A big flood of IPOs remains unlikely, however, because of ample private capital available for companies as an alternative to raising money in the publicly traded stock market, Ritter said.

"If the stock market rally continues, other quality companies that had put their IPO plans on hold are likely to follow," Ritter said in an email to MarketWatch. "I don't expect a big boom in IPO activity. Many quality venture capital-backed companies are finding that they can remain private and still have some liquidity for existing shareholders on platforms such as Nasdaq Private Market, EquityZen, and Forge Global."

eToro to price IPO after big revenue growth

Based on up to 80.87 million shares outstanding after it goes public, eToro would have a market capitalization of $4 billion if the IPO prices at the top end of the expected range of $46 to $50 a share.

eToro's 2024 net income jumped to $192.4 million on revenue of $12.64 billion, compared with net income of $15.26 million on revenue of $3.43 billion in 2023.

As of Dec. 31, eToro said it had 3.5 million funded accounts and a footprint in 75 countries.

"Our mission is to open the global markets, connect our users to leading investors and give them the tools they need to grow their knowledge and wealth," the company said in its IPO prospectus.

Also read: Online brokerage eToro moves ahead with IPO despite a mostly barren market for new issues

eToro positions itself in the competitive online brokerage space by offering trading in stocks, cryptocurrencies, exchange-traded funds and options, while offering advice to investors.

One competitor, Robinhood Markets Inc. (HOOD), focuses on stocks, some cryptocurrencies and ETFs, along with IRA accounts with an offer to match contributions.

Last week, in a sign of healthy investor interest, Aspen Insurance Holdings (AHL) increased the size of its initial public offering to 13.25 million shares from 11 million shares.

The IPO raised about $398 million by pricing the IPO at $30 a share, the midpoint of its $29-$31 price range.

The stock fell 0.3% to $34.39 a share on Monday - its second day of trading.

Aspen Insurance has been a portfolio company of Apollo Global Management Inc. $(APO)$ since the private-equity firm acquired the company in 2019.

Also read: Why this drone maker is braving turbulent markets for an IPO

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 13, 2025 08:41 ET (12:41 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.