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How to buy Vaccitech (VACC) stock in Canada when it goes public
Here's everything we know so far about the Vaccitech IPO.
Vaccitech, the UK company that developed the AstraZeneca COVID-19 vaccine, is publicly trading on the Nasdaq. Learn more about the Vaccitech IPO, and find out how to invest in Vaccitech from Canada.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
What we know about the Vaccitech IPO
On Tuesday April 30, 2021, Vaccitech, a UK-based vaccine and immunotherapy development company, began publicly trading on the Nasdaq Global Select Market under the ticker symbol “VACC.”
The opening price per share was $13.62, which was somewhat lower than the anticipated share price of $17. With 6,500,000 million American Depository Shares up for grabs, the total amount raised from the IPO is around $110.5 million.
The lead underwriters of the deal are Morgan Stanley & Co. LLC, Jefferies LLC, Barclays Capital Inc. and William Blair & Company, L.L.C. Vaccitech originally filed a draft registration with the US Securities and Exchange Commission on April 9, 2021. You can view the prospectus here. We’ll update this page as more information becomes available.
Can I buy Vaccitech stocks in Canada?
Unfortunately, no. Vaccitech 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 Vaccitech 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.
Are there other ways to invest in Vaccitech from Canada?
Although Canadian investors can’t buy Vaccitech stocks directly, there are still 2 ways to back the company.
1. Buy stocks in companies that have invested in Vaccitech
Although it’s a less direct investment than purchasing Vaccitech stocks outright, one option is to back its various investors including M&G (LSE: MNG.L), Tencent (NYSE: TME, OTC Markets Pink Sheets: TCHEY), Gilead Sciences (NasdaqGS: GILD) and Liontrust (formerly Neptune, LSE: LIO.L).
Some of these are available on US stock exchanges, which are much easier for Canadians to access than overseas exchanges. You can access exchanges outside the US and Canada with a stock broker like Interactive Brokers that provides access to international stocks.
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, TME). 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 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.
2. Buy ETFs
You can also indirectly buy into Vaccitech by investing in exchange-traded funds (ETFs) that track its investors. By purchasing these ETFs, you can potentially earn gains when these companies are performing well. The following ETFs hold stock in some of Vaccitech’s backers:
- Upholdings Compound Kings ETF (BATS: KNGS)
- ARK Fintech Innovation ETF (NYSEArca: ARKF)
- Roundhill Streaming Services & Technology ETF (OTC Markets, Pink Sheets: SUBZ)
- iShares Genomics Immunology and Healthcare ETF (IDNA)
- Invesco Dynamic Pharmaceuticals ETF (NyseArca: PJP)
- iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB)
- iShares Evolved U.S. Innovative Healthcare ETF (OTC Markets, Pink Sheets: IEIH)
- VanEck Vectors Biotech ETF (NasdaqGM: BBH)
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.
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