Wealthsimple IPO: Can you buy the trading app's stock?

Summary

  • Canada reportedly saw the completion of 88 initial public offerings (IPO) the first half of 2021, which raised C$ 6.92 billion in total gross proceeds.
  • An Ernst & Young (EY) report points that Q2 2021 has been the best performing quarter for global IPOs in 20 years.
  • Amid this increasing demand for public debuts, investors in Canada seem to be speculating about the IPO possibilities of Wealthsimple.

As the Canadian economy rebounds from the pandemic, a rising number of private companies have shown interest in going public to raise money and expand their business operations.

In 2021, the number of companies looking to go public has catapulted in Canada. According to media and data firm CPE Analytics, Canada saw the completion of 88 initial public offerings (IPO) the first half of 2021, which raised C$ 6.92 billion in total gross proceeds.

These firms made their public debuts on at least one of the four major stock exchanges in the country, namely the Toronto Stock Exchange (TSX), Toronto Stock Exchange Venture (TSXV), NEO Exchange (NEO) and Canadian Securities Exchange (CSE).

If common routes like special purpose acquisition company (SPAC) mergers and capital pool companies (CPC) are excluded, the IPO figure reportedly stands at 47.

An Ernst & Young (EY) report points that Q2 2021 has been the best performing quarter for global IPOs in 20 years. The proceeds from these is said to have soared by 215 per cent year-over-year (YoY).

Amid this increasing demand for public debuts, investors in Canada seem to be speculating about the IPO possibilities of Toronto-based financial services company Wealthsimple.

If you are wondering the same, here is what you should know about Wealthsimple.

Is Wealthsimple legit?

The short answer would be, yes. According to the firm, it is a branch of Canadian ShareOwner Investments Inc. (CSI), an organization that has been in the business for over three decades.

When an investor sets up a trading account with Wealthsimple, the assets in the investment portfolio are reportedly held by Apex Clearing Corporation (ACC). It is important to note that ACC is a member of the Securities Investor Protection Corp (SIPC), an organization that seeks to protect investor assets when their broker files for bankruptcy or fails in the business.

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What does Wealthsimple do?

The financial services company allows its customers to contact financial advisors to discuss investment portfolios, tax planning, retirement, or estate planning.

Alternatively, if a person doesn't want to spend time with financial advisors, Wealthsimple also offers a Robo-advisors service.

A Robo-advisor is a digital platform that invests the money of the customers through an auto-pilot mode. This innovative technology can help investors park their funds automatically without the assistance of a person. 

Is Wealthsimple IPO on the cards?

According to Wealthsimple, over 1.5 million people are using its products. It also claims to hold C$ 8.4 billion worth of assets under management (AUM).

The Canadian enterprise is said to have raised around C$ 750 million in funding at a valuation of C$ 5 billion.

The company is yet to make any official announcement regarding a public debut. So, investors may have to wait around a little longer to grab Wealthsimple shares.

However, since 2021 has noted an expanding number of IPOs, it could see Wealthsimple enter the world of public trading too.

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