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How to buy TikTok stock from Canada when it goes public
Here's what we know so far about the TikTok IPO.
Updated . What changed?
Rumors are that TikTok my go public soon. However, much remains yet to be announced on when that might happen or what it might look like.d
TikTok recently came under fire for its ties to China amid privacy concerns. But its deal with Oracle and Walmart to form TikTok Global has laid many of those concerns to rest. The deal leaves China-based IT company, ByteDance, with majority ownership of the app. Walmart has a 7.5% stake and Oracle — which has been given the authority to check TikTok’s source code — has a 12.5% stake.
Now that many of the concerns about TikTok have been laid to rest, the company is once again looking to launch an IPO.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Will I be able to buy TikTok shares from Canada?
You won’t be able to buy TikTok 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. Given that TikTok Global is a US-based company, you’ll need a brokerage that provides access to US exchanges such as the NASDAQ and NYSE (although it’s unclear where, exactly, TikTok shares will become available).
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.
What we know about the TikTok IPO
There’s speculation that TikTok will have an IPO. We’re unable to confirm that news, and TikTok has not yet filed a viewable Form S-1 with the US Securities and Exchange Commission. We’ll update this page with information as it becomes available.
There’s no news yet about how much the stock will cost when it goes public. No date has been set for when the stock will be publicly available.
How to buy shares in TikTok when it goes public
Once TikTok 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.
- 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 TikTok. Find the stock by name or ticker symbol. 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 TikTok 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 TikTok, depending on your broker.
- Check in on your investment. Optimize your portfolio by tracking how your stock — and the business as a whole — performs over the long run. You may be eligible for dividends and shareholder voting rights on management decisions that can affect your stock.
How do similar companies perform?
Here’s how competing e-commerce marketplaces fared after going public.
Facebook (NASDAQ-GS: FB). Facebook was founded in 2004 in the US and is currently the world’s largest social media site with around 2.5 billion active monthly users. Facebook, Inc.’s holdings include Facebook, Instagram, Messenger, WhatsApp and Oculus virtual reality products. The company went public on the NASDAQ in 2012, trading at $38 per share. The stock saw an all-time high of $303.91 in August, 2020. It’s closing price on December 17, 2020 was $274.48.
Twitter (NYSE: TWTR). Popular US-based microblogging app, Twitter, was founded in 2006 and is currently the second largest social media platform in the world with around 330 million users. Twitter, Inc. offers tools to let users syndicate content. It also provides subscription-based access to its public data feed. It started trading on the NYSE in 2013 at $26 per share. The stock saw an all-time high of $73.31 on December, 2013. It’s closing price on December 17, 2020 was $54.63.
Tencent QQ, owned by Tencent Holdings Limited (HKEX: TCEHY, OTC Markets Pink Sheets: TCEHY). Tencent QQ (or QQ for short) is a Chinese instant messaging app and web portal with over half a billion users who use it to access games, music, shopping, movies, voice chat software and more. In 2004, Tencent Holdings Limited went public on the Hong Kong Stock Exchange with an initial share price of $3.70 HKD (about $0.61 CAD). In November, 2019, it saw a high of $602 HKD (about $99.24 CAD). It’s closing price on December 17, 2020 was $583 HKD (about $96.11 CAD).
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.
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.
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