D-Wave Quantum Inc. (NYSE:QBTS) says it’s ready to ditch its B.C.-based headquarters in favour of relocating it to the U.S.
This comes amid significant financial strains for the Burnaby-based quantum computing firm, which has seen its shares drop from more than US$12 per share in August 2022 to less than US$0.50 per share as of last month.
D-Wave’s outside accounting firm, PricewaterhouseCoopers LLP (Canada), informed the former unicorn last week that it would not stand for re-election, according to a June 13 filing with the U.S. Securities and Exchange Commission.
In a corporate filing, the company said it now intends to “transfer its principal executive office from Canada to the United States and engage a successor independent registered public accounting firm located in the United States.” In a statement to Glacier Media, D-Wave said that, "given D-Wave Quantum Inc. is a U.S. corporation, its principal executive office, for accounting purposes, will be shifting to the United States."
Although domiciled in the state of Delaware since going public last year, D-Wave did not name where in the U.S. it plans to move its head office to. The company's subsidiary, D-Wave Systems, will maintain its operations, office and staff in Burnaby.
D-Wave went public via a special-purpose acquisition company (SPAC) in August 2022 in a transaction that had been valued at more than US$1 billion. D-Wave debuted on the New York Stock Exchange (NYSE) at US$10 per share. Its share price rose above US$12 per share that month, pushing its market cap to US$1.3 billion, according to stockanalysis.com.
It was bad timing to go public, however, as a capital flight from high-tech stocks started in the latter half of 2022. D-Wave’s stock recently traded as low as US$0.42 per share, prompting the NYSE to warn that D-Wave was non-compliant with the exchange’s continued listing standards. The company’s market capitalization on June 1 was US$192 million – a fraction of what it was when it went public less than a year ago. Only recently did D-Wave’s stock rise above US$1 per share.
The fact that D-Wave went public through a SPAC was a sign that the high-tech sector was reaching saturation, sources say. SPACs tend to proliferate around asset bubbles.
“These big, huge SPACs, that was a symptom of the top of the market,” Brent Holliday, founder and CEO of Vancouver-based Garibaldi Capital Advisors, told BIV earlier this month. “If you look across all the SPACs, not many of them are doing well.”
From an average investor’s perspective, D-Wave may be hard to value because the average investor probably does not really understand the arcane science of quantum computing. Holliday characterizes it and fusion energy as “science projects” that investors may not fully comprehend – something that can cause challenges for a publicly traded company.
“D-Wave should be taken private and continue to build what it’s building and be a pioneer in quantum computing, as it has been,” Holliday said. “I think they have to, because at some point you get stuck in a public market where you can’t raise money because your valuation makes no sense.”
—With files from Nelson Bennett
Updated June 14 with a statement from D-Wave.
