eToro Shakes Up Valuation: Investors Offered $120M Secondary Share Sale

<p>In a recent
internal memo to employees, Yoni Assia, the CEO and the Co-Founder of eToro,
shared the company's achievements for the first half of 2023 and hinted at the
forecasts for the second half. </p><p>Moreover,
the company has agreed to a $120 million secondary share sale. This move allows
angel investors and some of the first employees to resell their shares to newer
institutional investors. As a result, this slightly lowers the market valuation
of the social trading giant compared to $3.5 billion after the <a href="https://www.financemagnates.com/terms/f/funding-round/">funding round</a> in
the first part of the year.</p><p>eToro to Sell Shares at a
Discounted Valuation</p><p>According
to information from CNBC, from the memo received by staff, it appears that some
employees and investors were given the opportunity to sell shares. Since this
is a secondary share sale, the company will not be issuing new securities and
will not make any profit from the transaction.</p><p>"As a
business which continues to demonstrate sustainable, profitable growth, we are
considered an attractive investment opportunity by many investors," Assia
commented in today's (Monday's) memo sent to employees.</p><p>This move
arrived after the company raised $250 million from investors and <a href="https://www.financemagnates.com/forex/etoro-gets-250m-funding-from-failed-spac-deal-valuation-hits-35b/" target="_blank" rel="follow">achieved a
valuation of $3.5 billion in March 2023</a>. This is significantly less than the
potential $10 billion valuation it could have achieved by going public. Such a
plan seemed realistic last year and was supposed to be based on a merger <a href="https://www.financemagnates.com/forex/brokers/etoro-confirms-public-listing-with-spac-merger/" target="_blank" rel="follow">with a
blank-check company named, Fintech V.</a> However, a downturn in crypto and stock
markets led to a decrease in retail investor activity, and the transaction
ultimately did not happen.</p><p>"This
is not a primary i.e. eToro is not raising money — rather it is a moment for
some long standing shareholders and employees to take some liquidity. As
always, please maintain confidentiality and do not share any details of this
potential transaction with anyone. Employees with eligible options will receive
an email with further details," Assia added.</p><p>Recently,
eToro has partnered with Twitter, now known as X. Thanks to this collaboration,
users can access trading via 'cashtags' directly from the social media
platform. All they need to do is add a dollar sign to the searched company or
cryptocurrency symbol.</p><p>eToro's CEO Summarizes the
First Half of the Year</p><p>Regarding
recent company results, Assia praised the "strong business performance in
the first half of the year" which saw a record EBITDA of over $50 million.
The funded accounts have grown to nearly 3 million, and the assets under
administration (AuA) have reached $7.8 billion. In June 2023 alone, eToro saw
the highest <a href="https://www.financemagnates.com/terms/e/equities/">equities</a> trading volume since 2021.</p><p>On top of that, the Co-Founder
of eToro mentioned recent new sponsorship deals, as well as regulatory
actions and changes in the offer. The Bank of Spain <a href="https://www.financemagnates.com/forex/spain-registers-etoro-as-crypto-exchange-custody-services-provider/" target="_blank" rel="follow">registered eToro</a> as the country's virtual asset exchange and electronic wallet custody services provider. Moreover, the company sponsored several new football clubs, <a href="https://www.financemagnates.com/forex/etoro-enters-the-world-of-womens-football-ahead-of-the-world-cup-2023/" target="_blank" rel="follow">including
women's football clubs</a>, in relation to the July Women's World Cup.</p><p>In terms of
offerings, eToro has introduced the ability <a href="https://www.financemagnates.com/forex/etoro-launches-new-cfds-for-extended-hours-stock-trading/" target="_blank" rel="follow">to trade on equity CFDs
outside standard session hours</a>. The offer provides an additional three hours of
daily trading on shares of the most popular U.S. companies.</p>

This article was written by Damian Chmiel at www.financemagnates.com.