eToro’s valuation continues to plummet (by 35-40%) in secondary sales
Israel business news website Globes is reporting that shares in local Retail FX and CFDs broker eToro are being offered for sale in “small deals,” at a significant discount to the valuation at which a secondary sale of eToro shares was completed just a month ago.
As was reported here at FNG in late July, the company helped arrange for its employees and other existing shareholders to sell some of their eToro shares, following eToro’s failed IPO last year. Those sales, totaling about $120 million, were done at a reported “slight discount” to the $3.5 billion valuation at which eToro raised money from existing investors earlier this year.
eToro announced plans to go public in March 2021 at a valuation of more than $10 billion, via a merger with a NASDAQ-listed special purpose acquisition company (or SPAC) called Fintech Acquisition V. The deal would have injected a significant amount of capital into the company, while also providing a mechanism for longtime shareholders and employees (many of whom were compensated with eToro shares and options) to convert their shares into cash. However after a lowering of the valuation to the $8-9 billion range and an attempt to restructure the deal (which required a significant outside investment from private investors), the deal was scrapped last summer.
According to Globes, the latest share sales are being offered at a valuation for eToro of about $1.7 billion – about 35-40% below the valuation of the secondary sales done just a month ago, and less than half the valuation of the company earlier this year when as noted above existing investors injected about $250 million into eToro.
Globes reported that eToro said in response to its report that, “…the company is not aware of any transaction that was made after the transaction we announced last month.”