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US financial company and investment app developer, Acorns, will go public soon via merger with Pioneer Merger Corp, a special purpose acquisition company. Here's what we know so far and how to buy Acorns stock in Canada when it becomes available.
On Thursday May 27, 2021, Acorns—the California-based financial company behind the popular Acorns investment app—announced that it will be going public via merger with Pioneer Merger Corp., a special purpose acquisitions company (SPAC).
The deal values Acorns at approximately $2.2 billion and is expected to close in the second half of 2021. The newly merged company will be named Acorns Holdings, Inc. and will trade on the Nasdaq Capital Market under the ticker symbol "OAKS."
Pioneer Merger Corp. (PACXU) was incorporated in 2020 and went public on the Nasdaq Capital Market on March 1, 2021. It sold 40,250,000 stocks at a price of $10 per stock, raising around $402.5 million total. The company filed a Form 8-K with the SEC on May 26, 2021, informing shareholders of the upcoming merger with Acorns. You can view the filing here.
We'll update this page as more information becomes available.
There are 2 main advantages to merging with an SPAC. Going public by merging with another publicly-traded company is quicker and easier than the traditional IPO process. Plus, funds raised by the SPAC from selling its stock gets passed on to any company it merges with. As a result, more and more companies have been choosing to go public via SPACs.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Once Acorns goes public, you'll need a brokerage account to invest. Consider opening a brokerage account today so you're ready as soon as the stock hits the market.
You won't be able to buy Acorns stocks on a Canadian stock exchange like the TSX or CSE. Instead, you'll need a Canadian broker that provides access to stocks sold on international exchanges. However, some Canadian brokerages don't offer access to international investments at all or only provide access to a limited range of investment opportunities.
You can access US exchanges like the NYSE and the NASDAQ using Canadian trading platforms like Questrade, Wealthsimple, Scotia iTRADE and Interactive Brokers. Interactive Brokers also provides access to many stock exchanges outside North America like the Hong Kong Stock Exchange (SEHK), Korea Stock Exchange (KSE), National Stock Exchange of India (NSE), Frankfurt Stock Exchange (FWB) and London Stock Exchange (LSE).
The process of buying stocks listed on international exchanges is basically the same as buying stocks in a Canadian company. You buy and sell using your online trading account or through an investment broker who handles international stocks.
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you'll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you've already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
Note: The dollar amounts in the table below are in Canadian dollars.
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