IPOs are special in many ways, often bringing heightened market activity that can create unique opportunities for investors. One of those opportunities lies in securities lending, where demand for newly listed shares can lead to elevated borrowing demand.
Case study: eToro (ETOR)
eToro is one of the most recognized names in the retail trading space, so it’s no surprise that its IPO generated strong interest from investors.
IPO date & price: Listed May 14, 2025, at $52 per share.
Market reaction: Shares saw strong early momentum, closing day one at ~$67. Since then, the stock has continued to trade in an elevated but volatile range, supported by robust Q1 earnings, growth in funded accounts, and market excitement around AI and social trading – a key part of eToro’s differentiated proposition.
Share value: Currently up ~24% since IPO, as of June 30, 2025.
But there’s more to the story.
While some investors benefited from the stock’s appreciation, others also earned additional income by lending out their eToro shares through securities lending programs, with average annualized returns of around 6%.
Let’s imagine a hypothetical scenario where you invested $10,000 at IPO.
That’s around 1% in 7 weeks just for holding your position.
Why consider securities lending?
If you’re a long-term investor in a company, why not let that conviction earn you more? Participating in a securities lending program can offer a way to generate extra income from your existing portfolio, without any changes to your strategy. Just make sure you understand any associated risks and ensure it aligns with your investment goals and risk tolerance.
For institutional investor use only. This material is provided for informational purposes only and should not be construed as an offer or solicitation to buy or sell securities or to enter into any securities lending transaction. Any lending rates shown herein are indicative of selected securities during the specified time period and are subject to change. Lending rates and returns shown are gross and do not account for fee splits, which vary. Not all securities are available or eligible for lending. Availability of securities lending programs may vary by jurisdiction and regulatory requirements. All investments carry inherent risks, including the potential loss of capital. Securities lending may not be suitable for all investors and may have tax implications; investors should consult their financial and tax advisors before participating.
