Dennis Hammer is a writer and finance nerd with six years of investing experience. He writes about personal finance for Wealthsimple. Dennis also manages his own investment portfolio and has funded several businesses in the past. Dennis holds a Bachelor's degree from the University of Connecticut.
Initial public offerings or IPOs allow a private company to sell its shares to the general public. This means you don’t have to be part of some exclusive hedge fund or venture capital firm to invest in such a company. Once a company goes public, it can often raise additional capital while providing value to shareholders in the form of stock appreciation, dividends, or both.
If you follow COVID-19 news, you’re probably aware of Vaccitech. Their recent IPO is big news in the biotechnology space. In this article, we’ll explain what Vaccitech is, why investors like it, and how to buy shares.Get started with Wealthsimple Trade. Sign up today and start building your portfolio with a free stock.
What is Vaccitech?
Vaccitech is a biotechnology company founded in 2016 as a spin-off from Oxford University. It develops vaccines and immunotherapies for infectious diseases and cancer. They have experience treating hepatitis B, HPV, and prostate cancer.
In early 2020, Vaccitech (working together with Oxford) invented a COVID-19 vaccine based on their proprietary technology. They partnered with UK-based global biopharmaceutical company AstraZeneca to develop, manufacture, and distribute the COVID-19 vaccine.
Vaccitech has been financed by Google Ventures (GV), Sequoia Capital, and other well known investing groups. Their IPO comes right behind their receive Series B funding round where they raised $168 million.
What is Vaccitech’s current market cap?
As of May 2021, Vaccitech’s market cap is 550.82 million. A company’s market cap is the total dollar value of a company’s outstanding shares. This includes all the shares owned by stockholders, company officials, and public investors. It’s a helpful number to gauge the value of a stock.
When is the Vaccitech IPO Taking Place?
Vaccitech’s IPO took place on April 30, 2021, under the ticker symbol VACC. This is when it became open for trading on the Nasdaq to the general public.
Why are people interested in buying Vaccitech shares?
While Vaccitech has developed multiple successful products, its success against COVID-19 has thrust it into the spotight. The vaccine rollout has had some issues, but those problems seem mostly due to AstraZeneca’s struggles. So far, it seems that investors haven’t held Vaccitech accountable for AstraZenaca’s issues.
Furthermore, the underlying technology platform used to develop treatments appears promising. Investors have high expectations for future developments.
How can I buy shares of Vaccitech?
Now that the IPO has happened, you can purchase shares of Vaccitech right now. Here’s a step-by-step guide to buying Vaccitech.
Step 1: Open a brokerage account
Your first step is to open a brokerage account with a financial institution that allows retail investors to buy and sell stocks. If you already have an account with a brokerage—like Wealthsimple—you can use it to purchase shares of Vaccitech. Otherwise, look for a brokerage that offers the following:
An easy to use trading platform. Some platforms are archaic or designed for advanced users. You want something simple that doesn’t overwhelm you with information.
Access to other securities and financial products in case you decide to expand your investment portfolio in the future.
Low commissions and a simple fee structure. There’s no need to pay a lot to make trades these days. Be sure you understand what you’ll pay for each transaction.
Once your account is open, the brokerage will require you to fund it. You need funds in the account to purchase stocks and other securities. Most brokerages have a simple process for this.
Step 2: Decide how many shares you want
Now that you’ve opened a brokerage account, you’ll need to decide how many shares of Vaccitech to buy. This starts with the amount you’re willing to invest.
Divide the total amount you want to spend by the current share price. For example, if the price is $20 a share and you’re willing to invest $1,000, you can purchase 50 shares ($1,000 / $20 = 50).
Like any stock, purchasing Vaccitech shares comes with some risk. Hopefully the stock price goes up, but there’s always a chance it will fall, so never invest more money than you can afford to lose. We strongly recommend diversifying your portfolio with different kinds of securities to reduce the risk of losing everything.
Step 3: Choose your order type
There are multiple ways to purchase shares of any stock. Before you purchase Vaccitech shares, you’ll need to choose an order type. There are two options here:
Market Orders: This is an order to trade the stock at the current price when the order reaches the exchange. Once the order is submitted, you’ll have to pay the price at that moment of execution, even if it’s higher or lower than you expected. With popular stocks, however, there’s usually enough activity that the order will fill at or near your order price. (There are no guarantees, of course.)
For example, if Vaccitech is currently $15 a share and you place a market order, you’ll likely pay something close to $15 (with some slight fluctuation). The major benefit here is that you get your shares immediately.
Limit Order: A limit order is an order to buy or sell a security at a specific price. For purchases, limit orders are only executed at or below the limit price. For sales, limit orders are executed at or above the limit price. This gives you control over how much you spend, but orders might take longer to execute (especially if your limits are substantially different than the current price).
For example, let’s say Vaccitech is currently $15 a share and you place a limit order to purchase shares at $10 a share. Your order will only be fulfilled when the price falls to $10 or less. If you place a limit order to sell shares at $20, it will only be fulfilled if the price reaches $20 or more.
Step 4: Execute the trade
Once you’ve chosen how many shares you want to buy and the order type you’ll use to buy them, all that’s left is to execute the trade on your broker’s platform. The broker will handle purchasing the shares, deducting your payment from your account, and adding them to your account.
If your broker can’t fulfill the order that day, it may leave the order open indefinitely or cancel the order when the markets close at the end of day. This depends on your account preferences.
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