Shares of eToro (ETOR 32.44%) are soaring in their trading debut on Wednesday. The stock and crypto trading platform’s shares surged 28.2% as of 2:20 p.m. ET after opening at $69.69, which was 34% above its initial public offering (IPO) price of $52. The impressive debut comes as the S&P 500 was flat while the Nasdaq Composite gained 0.5%.
The trading app’s stock began trading today. The successful IPO signals potential renewed interest in public offerings.
Strong pricing above the expected range
eToro’s IPO raised nearly $310 million after selling roughly 6 million shares at $52 each, above the expected price range of $46 to $50. An additional 6 million shares were sold by existing investors.
The ability to price above the expected range and see significant first-day gains was a positive sign for the rest of the market. Recent high-profile IPO filings from fintech company Chime and digital physical therapy provider Hinge Health suggest that IPOs may soon have the resurgence many expected from the reelection of Donald Trump.
Image source: Getty Images.
Strong financial performance underpins the offering
eToro reported that its net income increased almost 13-fold last year to $192.4 million from $15.3 million in 2023. Much of this was from its exposure to the crypto market. For the first quarter of 2025, eToro expects crypto assets to account for 37% of its commission from trading activities. This is actually down from 43% a year earlier, but that is more a reflection of the broader market activity than the company’s operations.
I would wait until the post-IPO volatility calms down before investing, but eToro looks to be headed in the right direction and is a solid pick.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
