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How to buy stock in Snowflake in Canada
It's possible to buy Snowflake stock through a Canadian trading platform that provides access to international stock exchanges.
US-based Snowflake has joined the sizable list of tech companies going public in 2020. Should you add this cloud-focused data platform to your watch list? It depends on what you think of its growth trajectory — and its relationship with its competitors.
Snowflake is listed on the New York Stock Exchange (NYSE), a US exchange. So, if you want to buy into Snowflake, you’ll need to use a brokerage that provides access to international stocks. You should note that not all Canadian trading platforms offer access to US-listed companies. Some platforms don’t offer access to international investments at all or only provide access to a limited range of investment opportunities.
But don’t worry — you still have options. We’ll walk through what you need to know about buying Snowflake stocks from Canada.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Can I buy Snowflake shares from Canada?
You can’t buy Snowflake shares on a Canadian stock exchange like the TSX or CSE, but you can from a Canadian-based brokerage that offers international access to US companies listed on US stock exchanges. Specifically, you’ll need a brokerage that provides access to the New York Stock Exchange (NYSE), the stock exchange on which Snowflake shares are traded.
Two Canadian online trading platforms that provide access to stocks listed on the NYSE are Questrade and Wealthsimple. View our reviews of each to learn more.
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.
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 US stocks from Canada
How to buy shares in Snowflake in Canada
Here’s what to expect of the investment process:
- 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 Snowflake. Find the stock by name or ticker symbol: SNOW. Research its history to confirm it’s a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until Snowflake 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 a fractional share of Snowflake, depending on your broker.
- Check in on your investment. Congratulations, you own a part of Snowflake. 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.
What we know about the Snowflake IPO
On August 24, Snowflake filed an S-1 with the U.S. Securities and Exchange Commission. It plans to list its Class A common stock on the New York Stock Exchange under the ticker symbol “SNOW.”
The suggested share price is $100 to $110 and the deal is being underwritten by Goldman Sachs, J.P. Morgan and Citigroup, among others. It’s expected to go live on September 16.
Once Snowflake’s stock goes live, investors interested in purchasing shares must be ready with a brokerage account.
What we know about Snowflake’s balance sheet
Snowflake raised $450 million in its Series F funding round in 2018 and another $479 million in its Series G earlier this year. Its most recent valuation sat at a sizable $12.5 billion.
So, what does the company’s balance sheet look like following the influx of capital?
Snowflake reported $96.6 million in revenue for fiscal 2019 followed by $264.7 million in revenue for fiscal 2020. Snowflake is growing, that much is clear. But whether it’s profitable is a different story. Snowflake reported net losses of $178 million in 2019 and $348.5 million in 2020.
But here’s the good news: Snowflake’s losses are falling. In Q2 2019, the company reported a net loss of $177.2 million, while in Q2 2020, net losses sat at $171.2 million. And the company reported 121% year-over-year growth for Q2 — a promising figure for interested investors.
Snowflake investment risks
Snowflake competes with the likes of Amazon Web Services, Microsoft Azure and Google Cloud. And complicating this already competitive landscape is the fact that Snowflake actually relies on its competitors for storage and computing power.
CNBC reports that 85% of Snowflake’s workloads are housed on Amazon Web Services, with the other 15% split between Microsoft Azure and Google Cloud. It’s not easy to undercut and outperform a competitor when you rely on them to keep you in business.
The bottom line is that Snowflake isn’t the only company trying to capitalize on the shift from traditional data storage to the cloud. There are some big-name players on the field and competition in the tech sector is notoriously fierce.
Snowflake compared
Snowflake is a cloud-based platform that helps businesses securely house and analyze their data. It was founded in 2012 and is headquartered in San Mateo, California. It has over 3,000 customers — 56 of which are accounts worth over $1 million, including Cisco and Capital One. The platform facilitates over 500 million queries daily.
Snowflake is not an accredited business with the Better Business Bureau (BBB) from which it receives an F rating for failing to respond to a complaint.
How are similar stocks performing?
Snowflake is frequently compared to Apple, Amazon and Google, but these companies do much more than cloud-based data storage. Companies that exclusively focus on the type of service Snowflake offers include Cloudera, Teradata and MongoDB, but these companies haven’t been performing as well. Examining these competitor stocks can help you gauge how the market is doing but aren’t a direct indicator of how Snowflake will perform.
Compare online trading platforms in Canada
To buy stock, you’ll need to open a brokerage account. Compare your options using the table below to find the best fit. Take a look at our guide to opening a stock trading account to learn more.
Note: The dollar amounts in the tables below are in Canadian dollars.
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