The valuation of eToro has plummeted a further 35 percent to 40 percent as the share price of the Israeli online trading company was recently offered at $60 apiece in small secondary deals, Globes reported. This reduced the valuation of the company to as low as $1.7 billion, which is a significant drop from the last official valuation.

eToro's Valuation Plummets

Last month, eToro had a secondary share sale of $120 million, allowing angel investors and some of the first employees to resell their shares to newer institutional investors. The valuation of the company in that round was at $2.5 billion, lower than $3.5 billion from which it raised $250 million in March 2023.

eToro planned to go public last year and inked a deal with a blank-check company named Fintech V. The Israeli broker sought a valuation of $10.4 billion with the public listing, which initially seemed possible, but the deal eventually collapsed.

Commenting on the latest reported drop in valuation, an eToro spokesperson told Finance Magnates: "Every transaction in eToro shares is required to be registered in the company's registry. The company is not aware of any transaction that was made after the transaction we announced last month."

Declining Retail Trading Demand

eToro is one of the largest retail brokers that offers stock and crypto trading and contracts for differences (CFDs) instruments. The popularity of the brokerage initially soared as a social trading platform that allowed traders to copy the trades and strategies of expert traders.

Although headquartered in Israel, eToro has a global presence. It is licensed in multiple jurisdictions, including the United States, the United Kingdom, Australia, Cyprus, and Abu Dhabi.

The revenue of eToro peaked in 2021, reaching $972 million. However, retail trading demand took a heavy dent as the impact of the pandemic vanished from the markets, dragging the revenue of the broker down to $631 million in 2022.

"Toward the end of the first quarter of 2023, we saw an improvement in total revenue and profitability compared to the last quarter of 2022, as well as an increase in the volume of trading activity among our customers," eToro's Founder and CEO, Yoni Assia, said last March, adding: "2023 started positively when the markets responded positively to 'less bad' news and trading among private investors reached an all-time high."