As of market-open today, shares in secretive data firm Palantir will be available to purchase on the New York Stock Exchange, but should you buy?
2019 was the year of the initial public offering (IPO), which brought investors the likes of Uber, Peloton, and *almost* WeWork. 2020, among many other things, seems to be the year of the special purpose acquisition company (SPAC) or ‘reverse merger’, which has brought us the likes of DraftKings.
Palantir (NYSE: PLTR), on the other hand, is staying true to its own nature and going down the much less traveled route of the direct listing. This means that it will simply sell shares to the public without the use of intermediaries, and will also not be looking to raise capital unlike through a traditional IPO.
What is Palantir’s stock symbol?
Palantir will begin trading at 9:30 am EST under the ticker symbol PLTR.
How much does Palantir stock cost per share?
The New York Stock Exchange said on Tuesday that the reference price for Palantir’s direct listing is $7.25 a share. This does not mean that it will begin trading at that price as it could fluctuate depending on demand. In its prospectus, Palantir said that the average per-share price on the private markets in August was $7.31, while on September 1 it was $9.17.
Based on a fully-diluted share count of 2.17 billion shares outstanding, which includes unvested options and stock, the reference price would indicate a valuation of $15.7 billion, below its private valuation of $20.4 billion in 2015.
The Wall Street Journal reported on September 24 that Palantir had informed investors that it expected to begin selling shares at $10 apiece, a price that would give the company a valuation of roughly $22 billion. Then, in yet another filing yesterday, Palantir revealed that 475.8 million shares will be available for sale today when the bell signals a start to Wall Street’s madness.
What does Palantir do?
That’s a very good question, and one any prospective investor should already know the answer to. First, let’s hear from their own mission statement:
Our mission is to help our users, the people doing the hard work on complex, real-world problems. We do this by writing software that enables effective analysis against complicated, data-driven problems.
Sounds like any standard Silicon Valley SaaS startup, but that’s where the comparison ends. Secretive and divisive, Palantir specializes in data-gathering and analysis, most of which it does for government agencies. As of August 2020 when it filed for a direct listing, it had about $1.5 billion in federal government contracts alone, including recent jobs with the Space Force — not the Netflix show — and the Navy.
Is Palantir profitable?
Palantir is nowhere near profitable and never has been. According to its most recent filing in August, sales rose 25% in 2019 to $742.6 million, with a net loss that narrowed slightly from $580 million to $579.6 million.
The company also revealed that in its 17-year history, it has never been profitable and might never be, saying, “We expect our operating expenses to increase, and we may not become profitable in the future.”
Sounds like a strong start to public life…
Should I buy shares in Palantir?
It depends on your appetite for risk, and be under no illusions about this: Palantir is a risky investment. Not only would you be betting on a company that has openly admitted to having no path to profitability, but it is arguably a bet that instability and terrorist threats will continue to plague the U.S.
Not only that, but Palantir has come under significant scrutiny from the general public in recent months for its role in aiding the U.S. Immigration and Customs Enforcement agency (ICE), as well as a recent agreement with the UK government to provide analysis on post-Brexit border control.
However, in an (unfortunately) increasingly volatile world of pandemics and civil unrest, it is likely that there will be no shortage of need for Palantir’s data services. It is not exactly a stock that I would go for personally, but for those with an appetite for risk, it could be a winner.
- Who founded Palantir?
It was founded by Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp.
- Does Palantir pay well?
Palantir Technologies pays its employees an average of $126,745 a year.
- Who uses Palantir?
As of August 2020, Palantir has 125 customers, including the U.S. and UK governments, BP, Ferrari, and Airbus.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.