From left: WonderFi head of exchanges Dean Skurka, WonderFi strategic investor Kevin O'Leary and WonderFi CEO Ben Samaroo. Mr. Samaroo and Mr. O’Leary say the move to offer stock trading puts them in competition with other online investment firms such as Wealthsimple Technologies Inc.Supplied
Kevin O’Leary-backed WonderFi Technologies Inc. WNDR-T is launching itself as an entrant in the competitive discount brokerage industry by offering a new way for customers to buy stocks and bonds through its cryptocurrency trading platform, while tokens and digital assets such as bitcoin plummet in a volatile market.
Toronto-based Bitbuy Technologies Inc., the first company to be regulated as a crypto marketplace in Canada, was bought out by Vancouver-based WonderFi earlier this year as part of a spree of acquisitions. WonderFi is now partnering with Canaccord Genuity Group Inc. and Alpaca Securities LLC to provide Bitbuy’s nearly 400,000 users with access to trading and investing in U.S. stocks, exchange-listed securities and exchange-traded funds, or ETFs.
In interviews with The Globe and Mail this week, WonderFi chief executive Ben Samaroo and Mr. O’Leary, a strategic partner and television celebrity, often dubbed Mr. Wonderful (the source of the company name), said the move puts them in competition with other online investment firms such as Wealthsimple Technologies Inc. They would not reveal specific costs for trading services.
Bitbuy will not offer access to Canadian stocks when it launches the new services in the first quarter next year. It will, however, offer fractional trading in U.S. stocks and real-time settlement. This means customers will be able to purchase stock based on a dollar amount they select, rather than paying the price of a whole share. Canaccord will route, execute, clear and provide custody for customer accounts and trades. Alpaca broker software will be used for instant settlement.
Mr. O’Leary said WonderFi is doing this because it wants to create a one-stop shop for retail investors. “We are primarily aiming Gen Z and millennials with this, who are not interested in looking at multiple places for multiple investment needs,” he said, adding that fractional trading often allows young Canadians with limited capital to build their portfolio for the first time. “We need to provide people with ample opportunities to make good investments,” Mr. O’Leary said.
Many companies around the world, however, have already split their stocks to make shares more affordable for a broader segment of the population. They include Shopify Inc. SHOP-T, Amazon.com Inc. AMZN-Q and Google parent Alphabet Inc GOOGL-Q.
Still, Bitbuy positioned the new trading services as part of a suite of other investment opportunities it aims to add onto its platform in the coming months, such as staking, which allows crypto holders to earn passive income through their digital assets, much like a high-yield savings account. And Mr. Samaroo said WonderFi plans to launch its business in other countries by next year, including the United States and Britain.
WonderFi itself has not been a great investment of late, as cryptocurrencies have plunged this year amid a broad market downturn. It’s recently traded for about 40 cents a share on the Toronto Stock Exchange after hovering at levels above $1.50 about a year ago, shortly after going public. The company reported a net loss of $26.1-million on revenue of $3.15-million for the nine months to June 30.