Can I buy stocks and shares of Twitter (TWTR)? – Forbes advisor Canada

On Friday, October 28, 2022, Elon Musk’s long-running and controversial acquisition of the social media platform Twitter was completed for the agreed price of just over $59 billion ($44 billion USD).

Musk, who posted a tweet saying the bird was released in reference to his ownership of the microblogging site, will own all shares in the site once payments to shareholders are finalized.

Trading in the shares on the New York Stock Exchange has been suspended, meaning no new purchases of the shares can be made.

shareholders were paid $70.34 ($54.20 USD) for each share they owned up to the time of acquisition.

Musk’s decision to delist Twitter means the company will be delisted after being listed on the New York Stock Exchange while a publicly traded company.

At the time, Musk was expected to change the way Twitter functions. It was speculated that he would change the site’s algorithm, reduce moderation, introduce a user editing facility, and lift the ban on grades banned by the previous management. Some of those measures have already taken place, while it remains to be seen whether others will or have already taken place behind the scenes.

With further developments, Twitter’s reach could be expanded so that the app becomes a multi-purpose life management tool with a range of administrative functions.

At the close of trading on Oct. 27, Twitter shares were priced at just over $71 ($53 USD). The New York Stock Exchange issued a notice say the suspension of trading in the stock was in effect prior to the market opening at 9:30am EST.

How to buy a stock

1. Create an account with a broker

If you have a registered retirement savings plan (RRSP), you can buy a stock on your existing account. If you don’t have one or if you want to invest your money for non-retirement purposes, you’ll need to open an account with a broker.

Brokers act as a middleman between you and the stock market, facilitating your orders to buy and sell stocks.

Brokers vary widely in terms of account minimums, fees and account types, so be sure to do your research and pick the right broker for your goals. If you’re looking for a simple and easy way to invest, check out our picks for the best online brokers.

Once you’ve found a broker that fits your needs, you’ll be presented with a number of account options, including retirement accounts and taxable investment accounts.

RRSPs offer valuable tax breaks, in exchange for locking up your money until retirement. Taxable brokerage accounts don’t have similar benefits, but you get a lot more flexibility. You can access your money without having to worry about early withdrawal penalties, such as withholding tax.

2. View financial reports

All U.S. publicly traded companies are required to file financial statements and annual reports with the U.S. Securities and Exchange Commission (SEC).

These filings are a wealth of information for potential investors. They provide insight into the company’s current performance, the risks facing the business model and plans for future development.

For example, in its latest quarterly earnings, Twitter reiterated that its long-term plans do not include maximizing profit margins, but rather investing in the company to drive user growth. This is the kind of strategy designed to build value over time, rather than driving up the stock price in the short term.

3. Determine how much money you want to invest

Consider the following factors when thinking about how much money to invest in a business:

• Current price: Always consider the current share price of the stock you are buying. While some brokers allow you to buy fractions of shares or parts of individual shares, only two brokers in Canada (Wealthsimple and Interactive Brokers) have that option. If your broker doesn’t allow you to buy fractions of shares, invest enough money to buy whole shares.
• General portfolio: Deciding whether shares of a company make sense for you as an investment depends on how they fit into your overall portfolio. Don’t invest your money in just one or two companies; instead, spread your investment dollars across a variety of different companies in a range of industries, such as technology, consumer staples, or utilities.
• Goals: Twitter had a proven track record, but lacked the dramatic returns offered by newer growth stocks. Because its performance was more stable before Musk bought the company, it was a good investment for long-term investment goals rather than short-term investing or day trading.

4. Place an order for stock

To start buying stocks, open your brokerage account and enter the ticker symbol of the company, in this case it was TWTR along with the number of shares you want to buy. You can also enter the dollar value you want to invest if your broker offers fractional shares.

When you buy stocks, you can usually designate an order type. The most common options are market and limit orders.

A market order tells the broker to buy or sell the stock right away at the best available price. A limit order, on the other hand, does not go through until the stock reaches a price you choose. Limit orders can be a good idea if you expect a stock’s price to fall soon.

5. Be aware of currency exchange fees and taxes

If you use Canadian dollars to buy US stocks, your brokerage will charge you a 1% to 4% currency conversion fee in addition to the normal exchange rate when you buy the stock and when you sell it.

It is possible to avoid these charges by holding your money in US dollars and keeping the money in a US dollar bank account with a Canadian bank or by performing a maneuver called Norbert’s Gambit using your brokerage.

This so-called gamble is when you buy a stock or ETF that is interlisted on US and Canadian exchanges. You buy Canadian shares of that stock or ETF, then you ask your brokerage to “journalize” your Canadian shares and convert them into US shares of the same stock, then you sell your US shares in US currency and you can use the US dollars use that result to buy any US stock or ETF you want, such as Amazon, without converting.

In terms of taxes, you are subject to a 15% withholding tax if your US investment produces a dividend. You will not be taxed at all by the IRS if your investment vehicle is within an RRSP because this particular registered account is recognized by the IRS, which is not the case for every registered account in Canada.

6. Monitor the performance of your investments

Even if you plan on holding your stocks for years to come, it’s still a good idea to periodically monitor and review your investment performance.

A useful gauge is to compare performance against the performance of major indices, such as the S&P 500, which provide an indication of how the stock market as a whole is performing.

What to consider before selling stocks

If you need to sell your shares, you can sell them by entering the ticker symbol into your trading platform and the amount you want to sell.

However, since selling stocks at a profit can incur capital gains taxes, you may want to consult a tax professional to discuss when it makes sense to sell and strategies to minimize your tax bill.

As a Canadian investor, you probably only owe capital gains to the CRA (50% of the growth value) and not to the IRS. The IRS only expects capital gains from you if you have an interest of 5% or more in a US company and that company’s main asset is US real estate.

In addition, if you earn $5 million USD from your U.S. investments, your estate will owe estate taxes when you pass away.

How to Invest in a Stock With Index Funds and Exchange-Traded Funds (ETFs)

While investing in stocks may be attractive to some investors, investing in a single company can be risky. If you want to reduce your risk, you can diversify your portfolio instantly by investing in index funds and ETFs.

Numerous index funds and ETFs once owned shares of Twitter. Some popular options were:

• Communication Services Select Sector SPDR Fund (XLC). This ETF aims to give its holders exposure to the global communications and technology industry.
• Invesco Dynamic Media ETF (PBS). Twitter was once the top holding company of the Investco Dynamic Media ETF, holding 7.3% of the fund’s total portfolio.
• Vanguard Total Stock Market Index Fund (VTSAX). If you’re looking for a broader index fund, consider the Vanguard Total Stock Market Index Fund, which aims to duplicate the performance of the entire U.S. stock market. In fact, we’ve chosen VTSAX as one of the top total stock index funds. When the company went public, VTSAX owned nearly 3% of Twitter.

But keep in mind that investing in US stocks and ETFs is probably not the most cost-effective investment strategy for Canadians. To save on currency conversion and exchange rate costs, it is best to open a bank account or brokerage account in US dollars, so that all the costs you normally incur can be avoided.