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This neighborhood-oriented social network may be going public by IPO, direct listing or reverse merger. But nothing is set is stone and no word yet on its potential market, release date or share price. Here’s what we know so far and how to buy in from Canada when the company finally goes public.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
To be honest: not much. At least not yet. Most of what we know about Nextdoor’s potential listing is speculative — including how it plans to go public. The social network platform may file an IPO, direct listing or pursue a reverse merger with a blank-check SPAC.
Reports suggest Nextdoor is targeting a company valuation between $4 to $5 billion. According to PitchBook, it was worth $2.1 billion in 2019. To date, the platform has raised nearly $470 million.
We’ll continue to update this page as more information becomes available about Nextdoor’s IPO.
You won’t be able to buy Nextdoor shares 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. Specifically, you’ll need a brokerage that provides access to US exchanges, given that Nextdoor is a US-based company.
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.
Once Nextdoor 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.
Nextdoor was founded in 2011 and is headquartered in San Francisco, California. It became available in Canada in 2019. The company operates as a social networking platform for neighborhoods: a place for community members to connect, share news, make recommendations and support local businesses. It makes money through sponsored ads, local business deals and neighborhood sponsorship from real estate agents and home service providers.
Today, the platforms operates in more than 270,000 neighbourhoods across 11 countries including Canada, the US, the UK, Germany, Italy and Australia.
In March 2020, the platform’s daily active users rose 80% month-over-month as Nextdoor focused on safety updates and the support of elderly neighbors and small businesses. But it came under fire in the wake of the Black Lives Matter movement when it was discovered that local Nextdoor moderators were banning posts that used #blacklivesmatter.
In response to criticism that it failed to moderate the racial profiling present on its platform, Nextdoor released a statement in June 2020 to its members. In the statement, Nextdoor’s CEO, Sarah Friar, condemned racism and outlined how Nextdoor plans to tighten community moderation and increase organizational diversity. It also released a new feature called a Kindness Reminder to help reduce abusive posts.
It’s impossible to predict how this, or other potential future scandals, could affect Nextdoor’s stock once it goes public. But scandals often lead to volatility, so it may be worth researching the company further to see how they’ve handled other sensitive issues.
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 table below are in Canadian dollars.
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.
Private equity could be a way to maximize returns. Learn more here.
Prepare to revamp your asset allocation and explore new investment classes when you’re in your 30s.
Read our 7 tips for starting a portfolio if you’re new to investing.
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