Compass Therapeutics, Inc. has withdrawn its IPO. No word has been released on when it will go public in the future. In the meantime, here’s what investors need to know.
What we know about the Compass Therapeutics IPO
On October 19, 2020, Compass Therapeutics, Inc. filed a draft registration with the US Securities and Exchange Commission. The company had planned to go public on the Nasdaq Capital Market under the ticker symbol “CMPX.” It expected to raise around $50 million by selling 9,000,000 shares at a price of $5 to $6 each.
On June 23, just a few months prior, Compass Therapeutics completed a merger with Olivia Ventures, Inc. The deal was valued at $60 million. The new company kept the name Compass Therapeutics, Inc.
Following the merger, private equity shares were issued to current and new investors. These shares were not available on a public stock exchange.
On November 13, 2020—less than one month after filing to go public—Compass announced it was withdrawing its IPO. No word has been released on whether Compass Therapeutics will go public in the future. We’ll update this page as more information becomes available.
How to invest in Compass Therapeutics from Canada
Although you won’t be able to buy stock in Compass Therapeutics directly, there are 2 ways investors can back the company.
1. Buy shares of companies that have invested in Compass Therapeutics
Although it’s a less direct investment than purchasing Compass Therapeutics stocks outright, one option is to back its various investors including Cowen Inc. (NasdaqGS: COWN) and Alexandria Real Estate Equities, Inc. (NYSE: ARE). These are available on US stock exchanges, which are much easier for Canadians to access than overseas exchanges.
How to buy shares in a company
You’ll need a brokerage account to buy and sell shares. Here’s how it works:
Compare share trading platforms. If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio. Narrow down top brands with our comparison table.
Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
Search for the company you want to invest in. Find the stock by name or ticker symbol (for example, COWN). Research its history to confirm it’s a solid investment against your financial goals.
Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until the stock reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimize risk through the market’s ups and downs. You may be able to buy fractional shares of companies, depending on your broker.
Check in on your investment. Congratulations, you own part of a company! Optimize your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
2. Buy ETFs
You can also indirectly buy into Compass Therapeutics by investing in exchange-traded funds (ETFs) that track its investors. By purchasing these ETFs, you can potentially earn gains when these companies are performing well.
The following ETFs hold investments in Cowen Inc. (NasdaqGS: COWN) and Alexandria Real Estate Equities (NYSE: ARE):
Innovator IBD 50 ETF (NyseArca: FFTY)
Invesco DWA Financial Momentum ETF (NasdaqGS: PFI)
Invesco S&P 500 Equal Weight Real Estate ETF (NyseArca: EWRE)
SPDR S&P Capital Markets ETF (NyseArca: KCE)
IShares Cohen & Steers REIT ETF: (BATS: ICF)
Real Estate Select Sector SPDR ETF: (NyseArca: XLRE)
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.
Investment accounts that do not qualify for this exemption include RESPs, TFSAs and RDSPs.
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.
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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
Stacie Hurst is an editor at Finder, specializing in a wide range of topics including stock trading, money transfers, loans, banking products, online shopping and streaming. She has a Bachelor of Arts in Psychology and Writing, and she completed one year of law school in the United States before deciding to pursue a career in the publishing industry. When not working, Stacie can usually be found watching K-dramas or playing games with her friends and family.
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