> Originally, this payment was not due until a Valuation Date of March 28, 2026, but the company received notice from Sandia that this date had been accelerated to October 8, 2024. So the company had to shut down and terminate almost all of the employees...
Does anyone have context or can someone explain how payment dates can be arbitrarily accelerated?
> can someone explain how payment dates can be arbitrarily accelerated?
It's never arbitrary. When a company sells stock it has a fiduciary obligation to its shareholders. With a loan, however, the relationship is adversarial. (EDIT: this is a loan disguised as a stock sale, so what I say below technically doesn't apply.)
A common clause in loan documents is acceleration [1]. The most common trigger for acceleration is default; the easiest way to do this is not make payments. But there are other requirements in a loan, called covenants [2], that a borrower must adhere to. (Think: a mortgage requiring you maintain insurance.) If a borrower breaches a covenant, the loan is in technical default and the lender may accelerate.
There is a third possibility, the callable loan [3], but that wouldn't make sense here. (When you deposit money with a bank, you're lending it money on callable terms.)
Huh. So Sandia gave Zapata cash in exchange for shares to be delivered no later than March 2026. Sandia had the right to demand its cash back if Zapata's stock fell below $1/share. (Simplifying.) The stock fell below $1. Sandia exercised its right. Simple enough.
Clever way to deny the borrower interest deduction in exchange for giving the lender long-term capital gains. I've been out of the game for too long to understand why one would structure a loan this way. Poor man's convert?
EDIT: I'm struggling to understand this. Sandia gave Zapata cash in exchange for future delivery of shares, the number of shares to be based on the future price of the shares. Also, if the price goes down, they get their money back. So far, we have puttable shares. But the put amount is "a cash amount equal to $1,250,000 (less the number of any Unregistered Shares) multiplied by the volume weighted daily VWAP," which makes no sense, because you're taking a dollar amount, subtracting a number of shares, and multiplying it by a per share price. I assume the underlying agreement knows how to do basic dimensions. (Also, VWAP means volume-weighted average price, so whoever drafted these defined terms is a numpty.)
EDIT2: Oh, it's a SPAC. They already had debt [1]. The agreement still looks overly complicated [2]. Given it's a SPAC it's safe to default to the assumption that any inexplicable financial engineering is solely devoted to putting money in sponsors' pockets.
EDIT3: Love that on page 6 the font randomly changes.
> date specified by Sandia after the VWAP Price (as defined in the Forward Purchase Agreement) for 20 trading days during a 30 consecutive trading day-period has fallen below $1.00 per share (a “VWAP Trigger Event”).
> Because a VWAP Trigger Event has occurred, Sandia has the right, but not the obligation, to accelerate the term of the Forward Purchase Agreement at any time
ie. The share price tanked below $1 and that was the condition.
Lookup ZPTA; the price has been below $1 for 6 months.
Presumably the announcements recently did not excite investors and they pulled the plug.
And for additional context, VWAP in this setting means "Volume-Weighted Average Price" (ie the average price of the transactions in some time window weighted by their quantity)
Which makes their use of "volume weighted daily VWAP" ambiguous between a typo or an integrated VWAP, e.g. volume weight each day's VWAP to come up with a period VWAP.
It's been a while so I'm a bit rusty on this and it's hard to google for, but usually when you have "volume vwap" it means "vwap in volume time", ie something like say my order is for 100 shares, then vvwap is the volume-weighted average price over the time taken on average to execute 100 shares.
In this case, as you say, the "daily vwap" is the vwap over the day each day, and then they are using the volume on each day to make a vwap of those over the longer period. I think. This is the kind of thing where when I was in securities the documentation would usually include the formula to disambiguate.
I love the landing page of the investment management company that decided to take their money back. They didn't even bother to update template content. This is when your clients find you not through the web search :D when you can have such landing page.
Considering that we're still at 15 as the largest factorized number with Shor's alg. on a physical QM, the fact that these companies exist at all is quite absurd tbh. IIRC there are also no useful ML algs. known in BQP\P, and all the quantum-simulated annealing stuff that works on noisy "QM"s doesn't seem to be a big win.
With this context, these "QM" companies are in reality, selling tech. that's even less capable than a vacuum-tube computer (much less a transistor calculator). Unless you care about simulating the hardware they have (for some reason), in which case it has "quantum supremacy" (lolz).
It should surprise no one that quantum software companies that *do not build hardware* will flop. It does not matter if it founded by famous Harvard scientists.
Hell, even quantum hardware companies are having a really hard time building a functioning quantum computer, let alone a useful one. Setting aside whether it's worth investing in "Quantum" stock at all, it is quite simply silly to invest in anything "Quantum" if they aren't building actual quantum hardware.
Zapata's PR stunts like "Quantum AI" race cars looks all the more comedically delusional now. Though I'm sure no one's learned a lesson from this. No I am not joking, I wish I could make something like this up:
I'm biased because I work at a full-stack quantum computing company (we produce chips and software), but I agree.
Quantum software-only companies are sometimes... strange. Most QC hardware purchases today are made by either purely research institutions (universities, labs, etc.) or research departments of commercial entities. Either way, there are usually public tender descriptions or private lists of requirements.
When you look at public tenders, you will often find seemingly arbitrary software integration requirements like "the QC must support quantum circuit compilation with ABC", where 'ABC' is some product of some quantum software company you never heard of. Then you go research that library, and if you're lucky it's open source, so you dive into their code and realize it's another attempt at building a "universal" standard for some layer of the QC stack, based on some research paper out of some university. The developers of that library would often claim that, despite them having no QC hardware of their own, they can build better software for arbitrary QCs. It's strange and unlikely to be true simply because there is no such thing as standard or even common quantum hardware. There is rarely interoperability between architectures (and I'm only talking about superconducting quantum computers, not other kinds).
And then you have to either comply and tackle a huge integration project, or convince the buyer that the software you have written for your own hardware is actually better suited for your hardware than software written by people who never seen your hardware.
I have a bit of a strange question for you: as a physicist I sometimes really wonder if quantum computing will ever work. Any chance you could elaborate on that? I guess you’re biased but still love to hear your thoughts.
Since nothing in the known laws of physics explicitly prohibit it, I think it's safe to say that quantum computing will some day work, in the same sense that nuclear fusion or interstellar human travel may work. Unlike e.g. faster-than-light travel, which will probably not work.
But in practice? On Earth, with our human society and economics? Hell, I don't know...
One pessimistic view is that QCs, being such complex and expensive engineering projects, will always be like flying cars: useful in theory, but other solutions are "good enough" and are cheaper. Quantum computers have to really, really advance a lot before they can actually solve problems better, cheaper, and/or faster than classical computers. The danger is that funding will end before we reach that point.
Another important point is that most progress seems to be in specifically superconducting quantum computers (IBM and the company I work at both produce QCs of this type). Superconducting QCs are very hard to scale; it's an incredibly difficult task to scale from hundreds of physical qubits (best chips today) to thousands/millions (necessary for error correction). I'd say it's more difficult than the task of colonizing the solar system. But there are other approaches to building quantum computers. One promising theoretical idea is topological QC [1]. Microsoft is betting on this; it it works, it may make superconducting QCs idea obsolete, like transistors made vacuum tubes obsolete.
I keep comparing QCs with interstellar travel because it's equally hard to answer questions about the possibility of the latter when human seemingly still can't figure out how to stop killing each other.
Anyway, I think humans made impossible things possible in the past. Splitting the atom, sending probes to other planets, landing on the moon, discovering new particles, etc. So I'm optimistic in general.
P.S. I gave a talk on quantum computing hardware & software recently; the organizers uploaded it to YouTube as unlisted, and want to make it public later. If anyone's interested, send me an email to hello[at]rakhim.org, and I'll send you the link.
Speaking of talks, here is an older presentation I gave about "oh no, quantum computers will break cryptography, danger danger!: https://www.youtube.com/watch?v=H6ANtrjbqN4
I agree that it was a grift, I tried to tell my penny-stock chasing friend to not toss a single penny on it after he showed me their pitch deck (which made it look like nothing more than a consulting firm for large enterprises). He didn't listen...
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