eToro IPO accessibility

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Are IPOs available at eToro

Unfortunately, initial public offerings (IPOs) of new US stocks are not available at eToro.

If you're still interested in buying the latest hot stocks as they debut on US markets, browse our list of the best brokers for IPOs. But before you do, read on to understand what an IPO is, how to take part and what risks you may face.

My key findings in a nutshell

Adam Nasli

Trading • Safety • Market Analysis

I've thoroughly tested eToro services with our analyst team by opening a real-money account and these are my most important findings:

Unfortunately you can't access IPOs of new US stocks at eToro
In an IPO, a company offers its shares publicly for the first time via a stock exchange
In most cases, you can participate in an IPO only via your broker
Excessive hype, price volatility and lack of information are the most common IPO risks

eToro IPO overview
	eToro eToro
US stock IPO accessibility	Poor
Speed of US IPO listing	Poor
Stock and ETF fee scores	5.0 stars
Research score BrokerChooser assessment showing how clear and deep market analysis the broker provides	3.5 stars

eToro

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$100

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Low

Index CFD fee

Average

Withdrawal fee

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1 day

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What is an Initial Public Offering (IPO)?

Are you the kind of investor who's hoping to buy new stocks before they become cool and famous? The ultimate way to do this is to take part in initial public offerings, or IPOs.

An IPO is a transaction when a private company offers its shares to the public for the first time. These can be newly issued shares, or shares owned by the company's founders and other private investors. The company's shares are subsequently listed on a stock exchange for anyone to trade freely.

Why do companies “go public”? Often, they want to raise funds to finance their growth plans. A public listing is also a good opportunity to increase visibility and win the trust of customers and business partners, as listed companies must regularly publish financial information and operational data. Another frequent motivation for IPOs is to provide an exit opportunity for founders and early investors such as venture capital firms or angel investors.

IPOs of famous companies such as Facebook or Spotify may dominate news headlines, but in fact, major stock exchanges often host several hundred IPOs a year, offering plenty of hot prospects for you to choose from.

How to invest in an IPO?

In most cases, retail investors like you aren't eligible to directly take part in an IPO. In the majority of IPOs, newly issued shares are available only to institutional investors such as mutual funds or brokers.

So that leaves you with two options: you can either apply at your broker to be included in the initial allocation of shares, or - and this is the easier and most common way - simply wait for the newly listed shares to become available for trading at your broker.

In either case, investing in an IPO is similar to investing in any stock. You submit an order to buy X number of shares, to be fulfilled immediately at the market price, or later at a specific share price that you set.

IPOs come with an exact date. These can usually be found in the IPO calendars of major exchanges such as the New York Stock Exchange or NASDAQ. However, exactly when the new shares become available for trading will depend on your broker - it may be the same date, or often only a day or two later.

IPOs also involve an offering price - again, this is usually only an indicative price, available only to a few select investors. Depending on demand for the stock on its debut day, the price you’ll actually face when the stock becomes available for trading may differ significantly from the offering price.

To find out more about the IPO process, check our detailed guide to investing in IPOs.

Risks of investing in an IPO

While we all fantasize about being the person who bought one of the first Bitcoins for $10, investing in a stock IPO is not always a one-way street to massive profits. Before you jump on the bandwagon, take a moment to consider the most common risks associated with investing in an IPO.

Overvaluation/underperformance: IPOs are sometimes priced higher than their fundamental value, due to media hype and investor enthusiasm. This can result in an immediate drop in the stock price as market sentiment quickly adjusts to reality.
Volatility and liquidity concerns: IPOs are often characterized by high levels of price volatility in the initial phase of trading, partly because the hype surrounding the IPO can attract speculative traders. Conversely, some IPOs can fall flat, with low trading volumes in the first days of trading. This lack of liquidity can make it difficult to trade shares at your desired price, leading to higher bid-ask spreads and potential execution challenges.
Lack of data and information: Unlike established companies with a transparent financial record, newly listed companies often have limited historical data for investors to analyze. Information in the IPO prospectus about current operations or future strategies is likewise often sketchy, making it challenging for investors to make informed decisions.

Risk disclaimer

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Disclaimer: 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

eToro USA LCC does not offer CFDs, only real Crypto assets available.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more!

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

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