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How to invest in Onion Global (OG) from Canada
Investors in Canada can't buy Onion Global American Depository Shares (ADSs). But there are other ways to back the company.
China-based ecommerce website and brand incubator, Onion Global Ltd., is selling American Depository Shares (ADSs) on the NYSE. Learn more about the Onion Group IPO, and find out if investors in Canada can buy in.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
What we know about the Onion Global IPO
On Friday May 7, 2021, Onion Global began publicly trading on the NYSE under the ticker symbol “OG.” The opening price per share was $11.21, which was 55% higher than the anticipated share price of $7.25. But by midday, the stock price had fallen to around $6.50.
With 9,310,350 million American Depository Shares up for grabs, the total amount raised from the IPO is around $68 million. This falls short of the company’s $100 million goal by $32 million.
Onion Global originally filed a draft registration with the US Securities and Exchange Commission on Aril 7, 2021. You can view the prospectus here. The lead underwriters of the deal are AMTD Global Markets Limited and Huatai Securities (USA), Inc.
We’ll update this page as more information becomes available.
Can I buy Onion Global stock in Canada?
Unfortunately, no. Onion Global has only announced plans to sell American Depositary Shares, which are equity shares of a non-US company held by a US depository bank. Generally, only US residents can have accounts with US depository banks. So, Canadians can’t buy Onion Global stocks directly.
Depository Banks are financial institutions that hold people’s assets (money, securities etc.) for safekeeping. Where stock trading is concerned, depository banks make it relatively safe and easy for US residents to buy stocks in foreign companies that trade on US exchanges like the NYSE or the Nasdaq. This is because a depository bank act as a custodian of stocks until they’re sold, after which it transfers the stocks between investors’ accounts.
Can I buy stocks in similar companies?
Onion Global operates an ecommerce website in China and develops commercial partnerships and lifestyle brands for Asian markets. Its 2019 revenue (in USD) was $2.85 billion—a 58% increase over its 2018 revenue of $1.81 billion. In 2020, the company’s earnings fell to $584 million (mostly likely due to the economic impact of COVID-19).
Although you can’t buy Onion Group stocks in Canada, you can invest in other ecommerce businesses and brand development companies listed on Canadian and US stock exchanges. Some of these include:
|Company||Market Capitalization||Stock info|
|Simply Better Brands Corp. (formerly PureK Holding Corp.)||$147.28 million||TSXV: SBBC (formerly PKAN)|
|Yum! Brands, Inc.||$35.51 billion||NYSE: YUM|
|Genius Brands International, Inc.||$538 million||NasdaqGS: GNUS|
|Amazon.com, Inc.||$1.75 trillion||NasdaqGS: AMZN|
|Alibaba Group Holding Limited||$640.46 billion||NYSE: BABA|
|Shopify Inc.||$188.30 billion||TSX: SHOP.TO|
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, AMZN). 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 the business as a whole — 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.
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.
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.
Open a stock trading account
You can compare features of stock trading platforms in the table below. Once you’ve decided on the right fit for your needs, click the “Go to site” button to get started.
Note: The dollar amounts in the table below are in Canadian dollars.
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