Nanalyze

3 Ways to Invest in D-Wave Stock Right Now Pre-IPO

Quantum computing promises to turn Moore’s Law on its head with exponentially faster computing times than we are capable of today. Canadian quantum computing startup D-Wave made headlines recently by taking a problem that would take 10,000 years to solve with conventional computing and then solving it in seconds. This would imply that quantum computing is 100 million times faster than conventional computers. With such mind boggling amounts of computing power, we can take all that big data we’re creating every day and begin to do some pretty cool stuff with it. Just yesterday, IBM announced that their own quantum computing chip is now available for developers to play with via “the cloud“. This is what the interface looks like to the “IBM Quantum Experience”:

IBM_Quantum_Experience

So while buying shares in IBM will give you next to no exposure to quantum computing yet, investing in D-Wave stock sounds like a very viable way to invest in quantum computing, The problem is, D-Wave is a privately held company. Since we’ve had strong interest from our readers about how retail investors can get exposure to D-Wave stock, we’re going to give you three ways as follows.

Buy Shares in Harris and Harris Group (NASDAQ:TINY)
We wrote an entire article on this topic which you can read about here. If at the time we wrote that article you bought shares in Harris and Harris Group (NASDAQ:TINY), you’d be down -44% on your position as of today but on the other hand, your exposure to D-Wave would have increased significantly. TINY’s holding in D-Wave now accounts for 16% of TINY’s current NAV and is now their largest equity investment. Since our original article, Harris and Harris Group (NASDAQ:TINY) wrote up their investment in D-Wave by $4.1 million giving their 5.1 million share position a current value of $11.5 million. This would imply a price of $2.24 per share of D-Wave.

Buy Shares in Pender Growth Fund (CVE:PTF)
One of our readers, Vanisle500, turned us on to this fund which holds shares in D-Wave. If he is still holding his 10,000 share position, then the value of that holding would have increased from $6,800 to $16,000 or an increase of +147% in just 8 months. The question is, how much exposure do we get to D-Wave by buying shares in Pender Growth Fund (CVE:PTF)?

According to their financial statements, as of December 31st 2015, PTF held 1,120,720 shares in D-Wave with an implied valuation of $2.5 million (using TINY’s latest valuation). Their NAV as of April 29th 2016 was $15.9 million which means that all things being equal, buying shares in PTF gives you a 15.7% exposure to D-Wave which is roughly the same amount of exposure that an investment in TINY would give us. Given the recent spike in the PTF share price, the fall of TINY’s shares, the increased liquidity for TINY, and the diversity of TINY’s other holdings, we’d buy shares in Harris and Harris Group (NASDAQ:TINY) over Pender Growth Fund (CVE:PTF) right now if we had to choose between the two for exposure to D-Wave. However, the absolute best way to buy shares in D-Wave is to actually buy shares in D-Wave which brings us to our third and best way to invest in D-Wave.

Buy Shares in D-Wave through Harris and Harris Group (TINY)
Last week an entity owned by TINY called “H&H Co-Investment Partners, LLC” began accepting subscriptions for investments from accredited investors to purchase a limited amount of equity interests in “H&H Co-Investment Partners, LLC D-Wave Series J”, an investment series created to invest in future rounds of financing of D-Wave Systems, Inc. For anyone who asked us how they can buy shares in D-Wave, this is your answer. You don’t have to be a shareholder in TINY to invest but do note the following:

Accredited investors interested to participate in this offering, who are identified as holders of Harris & Harris Group’s common stock immediately prior to the date of this announcement, will receive priority should the offering be oversubscribed, will be able to invest in the offering at reduced expense rates and will be entitled to reduced placement agent fees.

D-Wave is looking to raise $15,000,000 and the offer appears to expire on the 16th of June. In order to participate you need to create an account with FolioClient and invest a minimum of $25,000. For the average retail investor, that’s a significant amount. We’re not sure if we’re going to pull the trigger yet, but signing up for an account was easy enough. Be sure to read the prospectus which even contains some basic financials for D-Wave as seen below:

D-Wave_Financials

There is one last way which may be a long shot but we’ll mention it anyways. If D-wave looks to IPO, there’s one platform that allows retail investors to buy into IPOs before they go public. Motif Investing announced last year that they will begin offering pre-IPO shares for JP Morgan led IPO offerings. If D-Wave files for an IPO, let’s hope JP Morgan is the lead on the deal. In the meantime, you can open a Motif Investing account for free with no deposit required so you are ready to buy shares of future IPOs before they begin trading.

  • Rod Pantony

    June 7, at New York Genome Center, D-Wave presents. We know from Nanthealth’s IPO SEC filing, and “The $1,000 Genome” that genomics are closely related to the Cancer Moonshot 2020. That would make cancer manageable. Query whether D-Wave quantum computing can solve mathematically complex systems like cancer. Come on D-Wave, show us what you can do on June 7.

  • Rod Pantony

    What is the cancer growth factor for an individual?

    If we assume Marcus du Sautoy is correct that there is a simple and general formula for all biological population growth, that particular values for the growth factor will model mathematically chaotic lemmings population, then determination of an individual’s cancer growth factor may be helpful. The chaotic lemming curve drawn by Marcus du Sautoy might be similar to chaotic cancer curves, whereas smooth curves, produced by healthy patients, are determined by other values for the cancer growth factor.

    In other words, everybody has “cancer” , it’s the individual “cancer” growth factor that determines whether you’re at risk. Presumably determination of the cancer growth factor is complex, even chaotic and a “different” form of mathematics. Physical mathematics written at the nano scale? Chaos within chaos?

    So maybe D-Wave quantum computing can determine an individual’s cancer growth factor, smooth curve (homeostasis) or chaotic curve (cancer)?

    “Study offers new way to suppress growth factors related to cancer cell proliferation”

    http://www.news-medical.net/news/20150713/Study-offers-new-way-to-suppress-growth-factors-related-to-cancer-cell-proliferation.aspx

  • Rod Pantony

    Manhattan ought to submit problems to DWAVE. The following pdf paper is in the public domain (Google search):
    Novel Problems in NLP
    IMPORTANT PROBLEMS WITH LESS FOCUS
    It says: “Every contributor has their own ideas about the right way to do things. We have 100k+ global sources, up to 1.5m stories each day accessible to users”
    DWAVE might be optimal for processing a vector space with a million dimensions, very fast. Maybe a few seconds? The sort of Manhattan problem above.

  • Your suggestion to buy the weak (TINY) instead of the strong (PTF) should be evaluated for its logic. Why is TINY so weak compared to PTF? What needs evaluated are the financial conditions as well as management and business models. This is where a computer algorithm can be helpful, as it removes human gut instinct (not that reliable) and can help make the most informed decisions based on available data. Its practically human nature to want to bet on long shots. In stock investing however, historical data shows buying the underdog or under-performer is more often than not the worst choice, The stronger horse is almost always the best bet, The weak is weak for reason(s), and the strong is strong for reason(s).

  • your pal al

    you fail to mention the most important thing, buying D-wave directly is only for qualified investors, 200k of income in last two years or Liquid bank account with a million or more.

    • Nanalyze

      Thank you for the comment mate. Yes, actually that is a problem for many retail investors.

      Our past experiences have shown that “qualified” investors are vetted by an online questionnaire as opposed to someone coming along and checking your bank account balances or income statements. This means we suspect the number of “qualified” investors may be much smaller than it actually is.

  • Lincoln Gamble

    Problematic how do you verify true quantum computing

    • Nanalyze

      Good question. It would have to be based on capabilities. That’s the best proof. It does all those incredible things it’s supposed to do. You can also follow the money and see who is buying it.

  • Chris Hill

    True Quantum computing is the future. Multi dimensional computing solutions via quantum entanglement is the horizon. DWave opened the door.

Subscribe to the Nanalyze Weekly Digest

Subscribe to our Nanalyze Weekly Digest to receive a summary of all articles every week.

We’ll never use your email for anything other than sending you great articles about investing in disruptive technologies.

  • This field is for validation purposes and should be left unchanged.

55 Shares
Tweet1
Share5
Share49
Reddit
+1
Buffer