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Investors around the world want a pie of Tesla Inc. (NASDAQ:TSLA, TSLA.US) stock. The electric-vehicle maker’s scrips have zoomed multifold over the years, making it one of the most sought-after green stock globally.
Tesla CEO Elon Musk keeps investors on their feet, either via news or controversies, letting the company rack up some of the largest gains in the electric vehicle (EV) segment.
The NASDAQ-listed stock has an average daily trading volume of over 29 million shares in the last 50 days. These volumes include stock investors from across the world who wish to earn profits through the stocks’s performance, which is expected to grow over the years as the EV market expands further.
However, it is imperative to ask, how do international investors buy and sell stake in the EV stock? While different countries have a different set of regulations, let’s explore how investors in Canada can invest in the stock:
Source: Megapixel
How can Canadian investors trade Tesla’s (NASDAQ:TSLA, TSLA.US) stock?
Canadian investors generally participate in the equities market through online and offline trading platforms. Some of the popular offline ones in Canada include Questrade, CIBC Investors’ Edge, BMO Investorline, among others.
Largely online trading platforms have gained popularity among Canadian investors.
However, investors may see some fluctuations in the stock’s market price due to the exchange rate difference in the Canadian and the US dollar. Apart from this, trading platforms charge a nominal brokerage fee for the international trading transaction.
This process will prompt the trading platform to seek a request from a US-based broker to carry out the trades in the US market.
As for taxation, the US Internal Revenue Service will withhold 15 per cent tax on the dividends earned by a Canadian investor, according to treaty signed between the two countries.
This taxation rule is fixed since gains from US-listed companies is considered foreign income and taxed as per interest income taxation rate in Canada.
How is Tesla stock’s current performance and growth outlook?
The NASDAQ-listed EV company’s stock closed at US$ 623.71 on June 22, 2021, about 14 per cent down year-to-date (YTD).
Tesla is considered expensive at its average levels; however, analysts believe that despite the risks involved, it may turn out to be a profitable purchase for savvy investors. Its price-to-book ratio, which reflects on the stock’s market price vis-a-vis its intrinsic value, hovers around 26. That’s far above the regular consideration for an overpriced stock.
Despite this, the stock is one of the most traded stocks on trading platform Robinhood, which was mired in controversy for allegedly “gamifying” securities trading.
The US$ 600-billion company’s sales in China, one of its largest markets, was hit in April 2021, triggering the company to halt the expansion process of its Shanghai plant.
Its total revenues during the first quarter ended March 31, 2021, were 74 per cent higher year-over-year (YoY), aided by growth in vehicle deliveries. The net income was at US$ 438 million.
The company said in its earnings report that its focus shall remain on expanding its manufacturing capacity, with overall growth hinging on operational efficiency and supply chain stability. It looks forward to accelerating its vehicle deliveries in 2021.
However, uncertainty over the company’s stance on accepting bitcoin as a mode of payment may keep the stock price volatile and impact investors.
Its investments in the cryptocurrency were at US$ 1.5 billion in the first quarter of 2021, along with impairment losses worth US$ 27 million, as per the EV-company's US Securities Exchange Commission filing.
Please note: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
