Likud MK and former mayor of Jerusalem Nir Barkat will become the first billionaire in the history of the Knesset, following a successful NASDAQ IPO of a record $10 billion of the fintech company eToro, of which Barkat is one of the main investors, Calcalist reported on Monday.
Fintech (financial technology) aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses smartphones for mobile banking, investing, borrowing services, and cryptocurrency.
Barkat, who holds a significant portion of eToro shares, is currently not active in the investment fund because he is an MK on behalf of the Likud. However, with his handsome profits, he is expected to pay Israel’s Treasury many millions in income tax.
The company eToro was founded as RetailFX in 2007 in Tel Aviv, by brothers Yoni and Ronen Assia together with David Ring. It recorded a significant jump in its revenue and profitability in the past year and is estimated to makes many hundreds of millions of dollars every year. It recorded high profitability and an additional 5 million users in 2020 alone.
Like the online trading platform Robinhood Markets, which is considering a huge IPO worth at least $20 billion this year, eToro has also enjoyed a strong growth spurt over the past year, from two main directions: the massive entry of millions of young people into investments in 2020—and this number continues to grow; and eToro’s activity in cryptocurrency.
However, according to the Wall Street Journal (Online Platform eToro Called in Leveraged Crypto Trades When Bitcoin Price Peaked), on January 7, eToro informed its European clients that “due to the current high volatility in crypto markets, and the risk it presents, eToro has disabled the ability to open new leveraged crypto positions. There is no impact on existing, open leveraged crypto positions.” The next day, it notified its European clients that “due to extreme market volatility in the crypto markets, margin positions for all leveraged crypto positions” should be changed to non-leveraged, or they would be closed within four hours. A few hours later, the firm closed all leveraged positions. Together with any profit or loss incurred, money was returned to users’ account balance.