eToro’s Value Dips After $120 Million Secondary Share Sale

Trading platform eToro’s valuation has reportedly dropped following a $120 million secondary share sale.

As CNBC reported Monday (July 31), the Israeli company had been valued at $3.5 billion in a funding round earlier this year.

eToro, which lets users trade stocks, crypto and contracts, gave early employees and angel investors a chance to sell shares to existing investors, per a memo to staffers seen by CNBC.

As the report notes, the secondary share sale means eToro hasn’t issued new shares and won’t realize income from the sale, though it does offer an idea of what investors are willing to pay to purchase shares in the company.

“As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors,” eToro CEO and co-founder Yoni Assia wrote in the memo.

“This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers. 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.”

eToro announced in March of 2021 that it was planning to go public via a merger with special purpose acquisition company (SPAC) FinTech Acquisition Corp. V, a move that would have valued eToro at $10.4 billion.

However, the two sides called off the deal last July, saying the proposed merger agreement and the amendment failed to meet the closing conditions.

Earlier this year, eToro teamed with Twitter to let users trade financial assets on the Elon Musk-owned social media platform.

“Very excited to be launching a new $Cashtags partnership with @Twitter which will enable Twitter users to see real-time prices for a much wider range of stocks, crypto & other assets as well as having the option to invest through eToro,” the company said on Twitter in April.

The feature lets users check on the markets and buy and sell stocks, cryptocurrencies and other assets, eToro said.

“As we’ve grown over the past three years immensely, we’ve seen more and more of our users interact on Twitter [and] educate themselves about the markets,” Assia told CNBC at the time.

“There is very high quality content, real-time content on financial analysis of companies and what’s happening around the world. We believe this partnership will enable us to reach those new audiences [and] connect better the brands of Twitter and eToro.”