Will Lightcone repay their $300k loan to Manifold on time?
Basic
158
แน€56k
resolved Aug 19
Resolved
YES

As part of Manifund's operations, we've decided to issue a $300k loan to Lightcone Infrastructure!


This market resolves YES iff in 2 months time, Lightcone has fully repaid this with $303k received in Manifold for Charity's bank account. (I'd allow for ~week of payment processing, etc). Resolves NO if eg they default, or only repay partially, or get a loan extension.

Loan details

  • 2 month term, 1% interest (~6.15% annualized), collateralized against Oli's personal funds

  • Background: we had a call with Oli yesterday to discuss Lightspeed Grants & Manifund; one surprising thing was that Lightcone itself is immediately bottlenecked on cash for their Rose Garden Inn spending; and that other funders like OpenPhil have been slow to respond

  • I'm excited for the structure of this as a loan (vs a grant) from Manifold for Charity. A 300k grant would have represented a significant chunk of our budget, but a loan is something we can make with much less analysis, esp given that we were possibly going to park our ~2.2m cash balance in a high yield treasury account anyways

  • I didn't think very deeply wrt interest rate; originally offered interest-free, before realizing that we'd be losing out on baseline yield; 1% for 2 months felt roughly reasonable. The core motive was more "help out an org we think does great work" as opposed to "purely profit seeking".

    • Stephen informs me the market rate for a loan like this might be 15% annualized, in which case I'd view the difference between market rate and what we offered (~2.5% - 1% over 2 months on 300k = 4.5k) to be a donation to Lightcone

Conflict of interest notes: Manifold is discussing running a forecasting conference at Rose Garden Inn sometime around Sep 2023; we'd expect to pay for the use of the venue.

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"Ok, time to return these!" -Oli

(money not yet received but Oli did send me a document to look over and finalize)

predicted NO

@Austin If you don't receive money before market closes that means NO?

predicted YES

@MrLuke255 as mentioned in the description, I would have allowed about a week for payment processing to clear past market close.

But anyways, from Oli: "Wire initiated. Should get internal organizational approval later today, and then go out probably tomorrow."

Ben Paceboughtแน€500YES

@BenPace why is a possible insider going all in on Yes? I'm scared now...

@nickten Because they recently raised a whole bunch of funding

predicted YES

@nickten Two new-to-us and large funders verbally said they'd be down to give us a bunch of financial support. (I don't want to share their identities until after any donation has actually happened.)

I have been explicitly told on a few separate occasions โ€” often without asking โ€” that insider trading is fine and acceptable on Manifold, so I bet on this. If someone from Manifold tells me that there's actually established norms against it I'll certainly give any gained mana back.

Insider trading is great! I just hope you're correct ๐Ÿ˜…

@BenPace +1 for insider trading being actively good.

predicted YES

@BenPace confirming that insider trading is not only accepted, but often actively encouraged for it's prosocial "sharing of information" effects

predicted YES

(Also congrats!! Excited to not lose our money and more importantly my mana)

How does this resolve if Oliโ€™s personal funds are used to repay?

I would imagine yes

@Austin "Manifold is discussing running a forecasting conference at Rose Garden Inn sometime around Sep 2022" - I assume that should be "Sep 2023", not "Sep 2022"?

predicted YES

@DanielTilkin Fixed, thanks!

Shouldn't it be 300k loan FROM manifold?

@asmith "to" is modifying "repay" rather than "loan". Classically unclear headline!

Fundraising is not easy right now. If I were Lightcone, given my understanding of the situation, repaying Manifold in 2 months would be near the bottom of my priority list. An extension request is the most likely scenario. A partial or full default hinges on (1) ability to fundraise (I'd expect it to work out with sufficient time, but 2 months is tight), and failing that, (2) the tradeoffs in the social relationship between the involved parties.

rats didn't save REACH so I don't think they'll save RGI either

"Renovations being unexpectedly expensive and grants being unexpectedly thin" is not a recipe for speedy repayment... (Best of luck to Lightcone though! Rose Garden Inn is a very cool space!)

(from ACX open thread)

6.15% is an unusually good rate right now. I don't know what lightcone's finances look like, but if they're cash-bottlenecked like you say then it would be prudent for them to keep the loan going for as long as possible. Equivalently, you're donating 4.5k/two-months until the loan is repaid (or the rate changes), and comments seem to indicate you're willing to give them the extension if they ask for it.

I think >16% they ask for it.

Incidentally, I think >80% of the time this resolves NO, it's because Lightcone decides they would like an extension

@Austin Hmm, I feel like what people want to bet on is if they will honestly pay back the loan. Not if there is going to be an extension or not.

Another operationalization of this question that might have been more interesting is "Will Lightcone owe Manifold money by the end of 2023", which I'd put at <10%

@Austin Seems like an extension could count as "paying back the loan with another loan" or as "not paying back the loan (yet)" and I'm not clear what would make the difference.

predicted YES

@MartinRandall yeah, for the purpose of resolving this question I'm ruling an extension as not paying back the loan yet. I agree you could rule it either way, depends on what you're trying to discover

@Austin then change the title to for example "Will Lightcone's $300k loan from Manifold end by Aug 26?", which makes the question at a glance distinct from "Won't go Lightcone bankrupt by Aug 26?".