Finance

Israel-Hamas conflict a potential business risk in eToro IPO filing

Published

3 weeks ago

May 15, 2025

Yoni Assia, Co-Founder and CEO of eToro, speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2023.

Patrick T. Fallon | Afp | Getty Images

In eToro‘s IPO filing, ahead of the company’s market debut on Wednesday, the stock trading platform spent over 1,500 words spelling out the potential risks of operating in Israel, home to corporate headquarters.

While the current military conflict between Israel and Hamas hasn’t “materially impacted” business, “the continuation of the war and any escalation or expansion of the war could have a negative impact on both global and regional conditions and may adversely affect our business, financial condition, and results of operations,” eToro wrote in a section of the filing titled “Risks related to our operations in Israel.”

The company, which lets users trade stocks, commodities and cryptocurrencies, was founded in 2007 by brothers Yoni and Ronen Assia and David Ring, and is based in Bnei Brak, near Tel Aviv.

In its prospectus, eToro referenced the attacks of Oct. 7, 2023, by Palestinian Islamist group Hamas on Israel. In the year and a half since then, the two sides have mostly been at war in the Gaza Strip, where tens of thousands of Palestinians have been killed and much of the area has been made uninhabitable.

Tensions have also escalated with other designated militant groups in the region, including Hezbollah in Lebanon and the Houthis in Yemen.

“It is possible that these hostilities will escalate in the future into a greater regional conflict, and that additional terrorist organizations and, possibly, countries, will actively join the hostilities,” eToro wrote, adding that the magnitude of the conflict is “difficult to predict.”

Yoni Assia, eToro’s CEO, told CNBC in an interview that the company’s business is global, with operations worldwide. Regarding the challenges of being in Israel, Yoni Assia said “everything is in the risk factors.”

“We do hope to see more peaceful times,” he said. “It’s better for everyone and for our employees from a business point of view.”

EToro, which competes with Robinhood, had its Nasdaq debut on Wednesday. The stock popped 29% a day after eToro priced shares above the expected range. At the close of trading, the company was valued at about $5.4 billion.

EToro’s IPO comes as several tech companies get set to test the public markets following an extended drought dating back to the soaring inflation of 2022.

After the attacks of Oct.7, thousands of Israelis were called up for extended active reserve duty that caused some disruption to the country’s flourishing tech community. Ongoing obligations could “impact our competitive position and cause our sales to decrease,” eToro wrote.

Israel has also faced some backlash for its military campaign in Gaza.

The eToro filing cited International Criminal Court warrants for the arrests of Prime Minister Benjamin Netanyahu and his former minister of defense, and calls for boycotts from activist groups as potential roadblocks for the business.

The country has also been hit with credit downgrades from Fitch, Moody’s and S&P Global that could harm eToro’s operations, the filing said.

Etoro said that intensified cyberattacks since 2023, and potential damages from armed attacks, could raise costs or incapacitate its workforce due to safety concerns.

The company also highlighted tax law differences between the U.S. and Israel and the location of its executives as a potential risk factor.

“It may be difficult to enforce a U.S. judgment against us, our officers and directors in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors,” eToro wrote.

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