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US financial company and investment app developer, Acorns, will no longer be going public by merging with Pioneer Merger Corp, a special purpose acquisition company (SPAC). Here's what we know about the Acorns IPO and how to buy Acorns stock in Canada if, and when, the company goes public.
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What we know about the Acorns IPO
On January 15, 2021, Pioneer Merger Corp., a special purpose acquisitions company (SPAC), submitted a filing to the US Securities and Exchange Commission (SEC) with details on the termination of its merger with Acorns Grow Incorporated. As per the agreement, Acorns will pay Pioneer a $17.5 million termination fee in monthly installments.
Market conditions have been cited as the reason for the termination. Acorns—the California-based financial company behind the popular Acorns investment app—plans to pursue private capital investment for the time being, but has not ruled out the possibility of having a traditional (non-SPAC) IPO in the future when conditions are more favourable.
The business combination agreement was originally announced on May 27, 2021. Acorns stood to receive a market valuation of approximately $2.2 billion. The combined company would be named Acorns Holdings, Inc. and would trade on the Nasdaq Capital Market under the ticker symbol "OAKS." The deal was expected to close in the second half of 2021.
Pioneer Merger Corp. (PACXU) was incorporated in 2020 and went public on the Nasdaq Capital Market on March 1, 2021. It sold 40,250,000 stocks at a price of $10 per stock, raising around $402.5 million total. The company filed a Form 8-K with the SEC on May 26, 2021, informing shareholders of the upcoming merger with Acorns.
We'll update this page as more information becomes available.
What is an SPAC?
Special purpose acquisition companies (SPACs or "blank check companies" for short) are shell businesses that exist purely on paper. SPACs are created for the purpose of going public, selling stocks, raising capital and merging with another company.There are 2 main advantages to merging with an SPAC. Going public by merging with another publicly-traded company is quicker and easier than the traditional IPO process. Plus, funds raised by the SPAC from selling its stock gets passed on to any company it merges with. As a result, more and more companies have been choosing to go public via SPACs.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
How to buy Acorns stock when it starts trading
Once Acorns 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 stock trading platforms. Use our comparison table to help you find a platform that fits your needs.
- Open your brokerage account. Complete an application with your details.
- Confirm your payment details. Fund your account.
- Research the stock. Find the stock by name or ticker symbol – OAKS – and research it before deciding if it's a good investment for you.
- Purchase now or later. Buy your desired number of stocks with a market order or use a limit order to delay your purchase until the stock reaches a desired price.
Will I be able to buy Acorns stock in Canada?
You won't be able to buy Acorns stocks on a Canadian stock exchange like the TSX. Instead, you need a Canadian broker that provides access to international stock exchanges.
You can access US exchanges like the NYSE and the NASDAQ using Canadian trading platforms like Qtrade, Wealthsimple, Scotia iTRADE and CIBC Investor's Edge.
Interactive Brokers provides access to many stock exchanges outside North America like the Hong Kong Stock Exchange (SEHK), Korea Stock Exchange (KSE), National Stock Exchange of India (NSE), Frankfurt Stock Exchange (FWB) and London Stock Exchange (LSE).
Buy Acorns stock from these online trading platforms
Compare special offers, low fees and a wide range of investment options among top trading platforms.Note: The dollar amounts in the table below are in Canadian dollars.
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Tax implications of buying US stocks in Canada
Canadians who earn dividends from US stock investments must pay the US Internal Revenue Service (IRS) a 15% withholding tax on their earnings. The rate goes down to 10% for bonds and other interest-yielding US investments.
An exception is made for stock investments held in trusts designed to provide retirement income. This includes RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs that hold US stocks, bonds or ETFs are also exempt from US withholding tax. RESPs, TFSAs and RDSPs are not exempt.
Canadian and international investment income must be declared on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you'll be taxed by both the IRS and the CRA. 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 in your circumstances.
Related: Online stock trading
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, 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 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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