Secretive Tech Unicorn Palantir Technologies Has IPO

(Noted News) Palantir Technologies, the data tech company co-founded in 2003 by billionaire Peter Thiel, made its debut on the public market this week. Palantir, trading under the symbol “PLTR,” opened at $10 a share, up from the NYSE’s recommendation of $7.25.

On its first day, the stock reached a high of 50% above its original reference price, and then closed the day at $9.50 a share, $0.50 below its opening

Palantir, which is financially backed by the C.I.A, does massive data analysis projects for a myriad of big companies and federal agencies. It has 3 main branches of operation: Palantir Gotham, Palantir Metropolis, and Palantir Foundry.

Palantir Gotham is used for counterterrorism purposes for federal agencies like the United States Intelligence Community (USIC) and the United States Department of Defense. It has also been used by a Canadian public-private venture called Information Warfare Monitor. This branch is even alleged by the company to have been instrumental in the capturing of Osama Bin Laden, though co-founder Alexander Karp has said “That’s one of those stories we’re not allowed to comment on.”

Palantir Metropolis is used for financial analytics in hedge funds, banks, and other financial institutions. Palantir Foundry is used by corporate giants like Airbus, Fiat Chrysler, and Morgan Stanley.

Palantir has garnered a reputation over the years as being extremely secretive, operating only in the shadows within its small circle of elite clients, barely revealing any details as to what it is they actually do.

Even more puzzling about the new tech unicorn, is the fact that, in over seventeen years of existence, it has never turned a profit, and only three clients make up a third of its revenue. This was revealed by its August 2020 prospectus which recorded a revenue of $481 million in the first half of the year, but $164 million in losses.

The revenue to expenses ratio has been more or less the same for Palantir’s whole existence, but with a 50% jump in revenue this past year. This jump has come amidst business picking up during the COVID-19 crisis.

While most of Main street slowly dies, unprofitable tech companies like Palantir are somehow speeding up plans to go public. The original plan was to go public in 2021, but the coronavirus lockdown has apparently accelerated the plans.

Chief operating officer Shyam Sankar said that they have “started eighty-three new engagements with customers in the first three weeks of COVID without getting on a plane…Broadly speaking, COVID has been a tailwind for our business.”

Perhaps because of the secrecy and lack of profitability, Palantir chose to go public by way of a direct listing, which means they did not rely on any underwriters to assess the demand or financials of the company and set a share price. Instead, Palantir just took existing shares and brought them to market, with no extra capital being raised. On the same day as Palantir, tech company Asana also went public via a direct listing.

The only other two major tech companies to do a direct listing before Palantir and Asana are Slack (WORK.N) and Spotify (SPOT.N).

The vice-chairman and chief commercial officer of the New York Stock Exchange said that two companies going public via direct listing sets a new precedent in the public stock exchange.

“Today further advanced the direct listing as an option for companies looking to access the public market,” John Tuttle said.

Palantir sets another precedent in being perhaps the first company to be public, yet so reclusive and secretive, something that is likely to trigger scrutiny from investors and traders who will essentially be putting money into a company that not only doesn’t make money, but also doesn’t tell them exactly what it does.

The Denver-based company has numerous subsidiaries, such as FT Technologies, Markover Inc, and Kimonolabs Inc, among others.

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