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How to buy Newegg (N) stock in Canada when it goes public

Here's everything we know so far about the Newegg IPO.

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The tech-focused e-commerce marketplace is poised to go public through a reverse merger with Lianluo Smart Limited. Here’s how investors in Canada can prepare.

Note: all dollar amounts on this page are in US dollars unless otherwise stated.

What we know about the Newegg IPO

California-based Newegg plans to merge with publicly-traded Lianluo Smart Limited — a medical wearable and smart device provider headquartered in Beijing, China. Lianluo Smart’s stock currently trades on the Nasdaq for less than $1 per share.amaz

Post-merger, the combined companies will be called Newegg Commerce and its ticker symbol will be changed to “N.” The deal is being managed by Maxim Group.

No word yet on its projected share price or release date. To prepare, be ready with a brokerage account so that you can invest as soon as the stock goes live.

Will I be able to buy Newegg stock from Canada?

You won’t be able to buy Newegg stocks on a Canadian stock exchange like the TSX or CSE, but you can from a Canadian-based brokerage that offers international access to companies listed on stock exchanges outside of Canada. Given that Lianluo currently trades on the Nasdaq, so you’ll need a brokerage that provides access to US exchanges.

Canadian online trading platforms that provide access to stocks listed in the US are Scotia iTRADE, Questrade, Wealthsimple and Interactive Brokers.

The process of buying stocks in a US company while living in Canada is 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 US stocks.

How to invest in US stocks from Canada

How to buy shares in Newegg when it goes public

Once Newegg 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.

  1. 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.
  2. 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.
  3. Search for Newegg. Find the stock by name or ticker symbol: N. Research its history to confirm it’s a solid investment against your financial goals.
  4. Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until Newegg reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
  5. 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 a fractional share of Newegg, depending on your broker.
  6. Check in on your investment. Congratulations, you own a part of Newegg. 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.

Newegg’s balance sheet

Newegg was founded in 2001 and is headquartered in City of Industry, California. Its parent company is Chinese e-commerce organization, Hangzhou New Century Information Technology.

During the first six months of 2020, Newegg reported net sales of $863 million, gross profit of $125 million and net income of $19 million. Newegg’s market cap is expected to hover near the $880 million mark.

How do similar companies perform?

It’s impossible to predict how any stock will perform — and IPOs can be particularly volatile. But evaluating the performance of companies like Newegg can be useful in determining how the market is performing and whether now is a good time to invest in this industry.

Compare trading platforms that provide access to Canadian and US stocks

To buy stocks, you’ll need to open a brokerage account. Compare your options using the table below to find the best fit for you. Take a look at our guide on opening a stock trading account to learn more.

Note: The dollar amounts in the tables below are in Canadian dollars.

Name Product Available asset types Stock Fee Option Fee Account Fee ETF Transaction Cost
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, IPOs, Precious Metals
$4.95 - $9.95
$9.95 + $1 per contract
$0
Free
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Interactive Brokers
Stocks, Bonds, Options, Mutual Funds, ETFs, Currencies, Futures, Precious Metals
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0 (if monthly commissions are equal to or greater than US$10.00)
Min. $1.00, Max. 0.5% of trade value
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
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Compare up to 4 providers

Tax implications of buying US stocks in Canada

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.

How to invest in financial stocks

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.

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