One of the strangest technology companies in the world, last week the story became more bizarre than ever. But beneath the surface is a strangely attractive case for business: stocks.
Palantir (PLTR) provides data analysis software to both commercial and government customers. The 18-year-old company has two main platforms: Gotham for state-owned programs and Foundry for e-commerce clients. Palantir has served US military intelligence for many years, but has recently established a sales team to grow its commercial business. That program seems to be becoming more attractive.
In September of last year, Palantir went public on the stock exchange, the shares of which opened at $ 10. Since then, shareholders have been taken for a wild walk, selling for as little as $ 45 earlier this year. It is now about $ 25, which is still 150% more than the listing date.
In the last quarter of June, Palantir reached $ 376 million, 49% more than last year. The company received a huge boost from US commercial business, which grew by 90%. According to Palantir, the income of September reaches up to $ 385 million, և continues to forecast annually until 3025. 30% increase in core growth.
But the main story is lost in the noise. Palantir seems to be prospering because of disagreements. Almost everything he does is out of the box. Before listing last year, Palantir quietly moved its headquarters from Palo Alto to Denver. Reasoning comes down to politics.
“When we started the company in 2004, the idea was to bring world-class software to our intelligence and military communities,” Palantir CEO Alex Carp told me in an interview in June. “Many Silicon Valley companies have refused to work openly, tacitly, or with the US government,” he said. “I generally believe that there is a choice in the world. America has serious, tough, smart people. Sometimes there are ruthless opponents.”
Palantir is also doing unusual things with $ 2.4 billion in cash on its balance sheet. The company aggressively invests in PIPEs or private equity investments, which are used in almost every SPAC merger to increase the capital raised. Plantir has provided $ 310 million in more than a dozen SPACs or special purpose acquisitions, according to a recent SEC document. It completed $ 33 million in equity investments in three other companies.
The most recent tranche includes $ 20 million for Fast Radius, which offers a “cloud generation platform”. $ 15 million for Tritium, the maker of electric car chargers. $ 15 million for AdTheorent, which sells advertising software through machine learning; և $ 10 million for FinAccel, an Asian financial services company.
All targets are registered as Palantir customers. As of June 30, Palantir announced that it has commercial contracts with its SPAC portfolio companies with a potential value of $ 428 million. Revenue investment in the last quarter was only $ 3 million, or less than 1% of the total.
SPACs are a very profitable place for a public company to park cash. But I would argue that Palantir’s decision to provide capital to new customers is not as different from financing supplier debt for equipment purchases as
(IBM) և HP Enterprise (HPE) do, or implement strong venture capital programs, as they do
Nevertheless, it is a whim of some analysts. “While we do not mind thinking outside the box, we believe that the strategy can go too far, especially with software contracts that seem to be negotiated by Palantir with the same client investment,” wrote Citi Tyler. Radken recently. research note.
External strategy goes beyond SPACs. Last week, Palantir announced that it had bought 100 ounces of gold bars worth $ 50.7 million, which was a rather strange move even for Palantir. I did a text search in the SEC database looking for links to gold bars and found only links to other gold companies. The move forces
(TSLA) Bitcoin shopping seems commonplace.
The fact that Palantir decided to buy physical gold, not, say,
SPDR Gold Shares:
ETF (GLD) makes it even weirder. The palace is like the corporate equivalent of a death planner in the end. I tried to keep Carpi from asking about his sudden interest in gold, but Palantir refused to make it available.
An analyst following the company told me that the SPAC program ու Gold Invasion makes Palantir a difficult sale for institutional investors. You can see it in the shareholder database. Universities own only 25% of Palantir shares
(Snow) 58%, և:
But the same analyst is still worried about Palantir, saying that it “offers very interesting solutions to buyers who require scale and complexity.”
Palantir has fanatical followers among individual investors, the company plays with its fans. In its June quarterly earnings report, Palantir asked nine questions from retailers, only four from analysts.
According to traditional standards, Palantir is not cheap. The shares are sold 25 times the estimated sales of 2022. But get rid of the craziness, և Palantir seems to be the only best bet on the future of sophisticated data analytics. There are not many other ways for investors to gamble, և the world does not become simpler or less dangerous.
Write to the address: Eric Sav. Savits at email@example.com