Yoni Assia, co-founder and CEO of Etoro, will speak at the Milken Institute Global Conference held in Beverly Hills, California on May 2, 2023.
Patrick T. Fallon | AFP | Getty Images
In ETORO’s IPO application, ahead of the company’s market debut on Wednesday, the stock trading platform spent more than 1,500 words spelling out the potential risks in Israel, the headquarters’ home site.
While the current military conflict between Israel and Hamas has “substantially not affected” businesses, the continued war and the expansion or expansion of war could have a negative impact on both global and regional circumstances, and could have a negative impact on our business, financial condition and outcomes of operations.”
The company, which allows users to trade stocks, commodities and cryptocurrencies, was founded in 2007 by the brothers Yoni and Ronen Assia and David Ring, and is based in Bnei Black, near Tel Aviv.
In the prospectus, Etro referenced the attack by Hamas, a Palestinian Muslim group on Israel on October 7, 2023. Since then, for a year and a half, both countries have been primarily present during the war in the Gaza Strip, where almost tens of thousands of Palestinians have been killed, making much of the area uninhabitable.
Tensions are also growing with other designated extremist groups in the region, including Hezbollah in Lebanon and Houtis in Yemen.
“These hostilities could promote regional conflicts in the future, and could potentially involve additional terrorist organizations and perhaps countries actively participate in hostilities,” Etoro writes, adding that the magnitude of the conflict is “hard to predict.”
Yoni Assia, CEO of Etoro, told CNBC in an interview that its business operates worldwide and worldwide. Regarding the challenges of being in Israel, Yoni Assia said, “It’s all about risk factors.”
“We want to see a more peaceful era,” he said. “From a business perspective, it’s good for everyone and for the employees.”
Etro, competing with Robin Hood, made his Nasdaq debut on Wednesday. The stock was 29% a day after Etoro’s pricing exceeded expected range. At the end of the transaction, the company was valued at around $5.4 billion.
Etoro’s IPO is set up as several tech companies are set to test the open market following an extended drought that dates back to rising inflation in 2022.
After the attack on October 7th, thousands of Israelis were called out for extended, aggressive reserve obligations that would cause some degree of disruption in the country’s prosperous technological community. The ongoing obligation “will affect our competitiveness and reduce our sales,” Etro writes.
Israel is also facing backlash from its military campaign in Gaza.
Etro’s submission cites an International Criminal Court warrant for the arrest of Prime Minister Benjamin Netanyahu and his former Defence Minister, calling for boycotts from activist groups as a potential obstacle to the business.
The country has also been hit by credit downgrades from Fitch, Moody and S&P Global, which could harm Etro’s businesses, the filing said.
Etoro said the intensification of cyberattacks since 2023, as well as the potential damage from armed attacks, could raise costs or render the workforce helpless due to safety concerns.
The company also highlights differences in US and Israeli tax laws and executive locations as potential risk factors.
“It may be difficult to enforce US judgments against US officers and directors of the United States, Israel or US, or to assert US securities law claims in Israel or provide a process for officers and directors,” Etro wrote.
Watch: Etro stocks in Nasdaq debut
