How to Buy Nextdoor Stock When It Goes Public | Finder Canada

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How to buy Nextdoor stock in Canada when it goes public

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

Updated . What changed?

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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.

What we know about the Nextdoor IPO

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.

Will I be able to buy Nextdoor shares from Canada?

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.

Some of the Canadian online trading platforms that provide access to US-listed stocks include Questrade, Wealthsimple, Interactive Brokers and Scotia iTRADE.

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 Nextdoor when it goes public

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.

    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 Nextdoor. Find the stock by name or ticker symbol. 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 Nextdoor 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 Nextdoor, depending on your broker.
    6. Check in on your investment. Optimize your portfolio by tracking how your stock — and the business as a whole — performs in the long term. You may be eligible for dividends and shareholder voting rights on directors and management decisions that can affect your stock.

Company history

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.

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 table below are in Canadian dollars.

Name Product Available asset types Stock Fee Option Fee Account Fee ETF Transaction Cost Feature Table description
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Zero commissions on Canadian stocks.
Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Interactive Brokers
Stocks, Bonds, Options, ETFs, Currencies, Futures
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0 (if monthly commissions are greater than or equal to US$10.00)
Min. $1.00, Max. 0.5% of trade value
Extensive trading capabilities and global investment tracking.
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.
Qtrade Investor
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$6.95 - $8.75 + $1.25 per contract
$0 if conditions met, else $25/quarter
$0 - $8.75
Trade 100 ETFs free of charge.
Qtrade Investor offers low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options. Trade 100 ETFs free of charge and thousands more for $8.75 or lower.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
$0 account fee and free ETF transactions.
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Scotia iTRADE
Options, Mutual Funds, ETFs, GICs, International Equities
$4.99-$9.99
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
$0
$9.99 ($4.99 if completed 150 trades or more a quarter)
Pay no annual account fees.
Buy, sell and trade ETFs, Equities, Options and more with competitive commissions.
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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.

Online stock trading

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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