Palantir prepares a direct listing, instead of the traditional IPO, of 22 billion dollars on Wall Street. The controversial US mining company will start trading shares on September 30th
The listing of Palantir, the most controversial Californian data mining company with deep ties to US secret services and military agencies, is expected on September 30th.
According to the Wall Street Journal , Palantir will have a high valuation, a sign of continued investor interest in new stocks. Bankers told investors that the shares could start trading around $ 10 each, according to people familiar with the matter. This equates to a market valuation of nearly $ 22 billion on a fully diluted basis.
The company that creates software to manage, analyze and protect data (including tools to help track terrorism suspects) is notoriously confidential due to its relationships with governments around the world.
All the details.
WHAT PALANTIR DOES
Co-founded in 2003 in Palo Alto by Alex Karp and billionaire Peter Thiel, Palantir is a data mining company. The company develops software that can aggregate information on millions of people, including employment history, social networks, phone logs, and more.
Co-founder Thiel has close ties to US President Donald Trump, as well as the Pentagon and sectors of law enforcement and intelligence.
Palantir has attracted over $ 3 billion in venture capital funding from investors, including In-Q-Tel, the CIA's investment arm.
DIRECT QUOTATION AS SPOTIFY AND SLACK
The company has decided not to proceed with the traditional IPO and to go directly to the stock exchange, as done for example by Spotify and Slack . In this case, the company sells the existing shares on the public exchange and lets the market determine the price. Therefore, forgo the opportunity to raise more money, but save on commissions to banks or brokers for a normal quote.
The banks reportedly told investors that the shares could start trading at around $ 10, according to WSJ sources.
In private markets over the past year, Palantir shares have been trending upward. The volume-weighted average price in August was $ 7.31 and in September $ 9.17.
PROFITABILITY, A MIRAGE
Like many other high-value tech companies, Palantir never made a profit prior to their listing. In 2019, it reported a net loss of $ 579.6 million, roughly the same as in 2018. In the first half of 2020, it recorded a slight improvement, with a loss of $ 164 million, against a deficit of $ 274 million. in the first half of 2019.
THE VOTING STRUCTURE OF PALANTIR
The strong demand for the company's stock (which has never made a profit) is all the more notable because its founders have created one of the most aggressive governance structures ever seen. The shares of Palantir's three co-founders – billionaire investor Peter Thiel, CEO Alex Karp, and chairman Stephen Cohen – are structured to strengthen as the three founders sell them.
Palantir 's voting structure represents a new frontier that allows startup founders to remain in control, even after listing. Investors have become very wary of voting structures that give founders tremendous control.
However, this attitude seems to have changed with the Palantir listing, their risk appetite has increased and investors now seem willing to overlook these issues in order to get hold of 'hot' stocks, while the new issue market is booming. expansion.
THE EXPECTED EVALUATION
A listing that would give Palantir a market valuation of nearly $ 22 billion. For fiscal 2020, Palantir said it expects revenue growth of 42% to approximately $ 1.1 billion.
If it reaches its new revenue target, it would be a 41% growth rate over last year, an acceleration from the previous year's roughly 25% growth rate.
THE SHOULDER TO BIG TECH
Palantir does not shy away from controversy.
In the company's listing prospectus filed at the end of August, Alex Karp took the opportunity to denounce the commercial surveillance of Big Tech. At the same time he defended the government's work. In fact, the CEO defended Palantir's work in collecting data with government agencies, criticizing the business practices of other companies active in the technology sector. Without mentioning them explicitly, the reference is to Google, Facebook & Co.
In the document Karp sought to transform what was seen as one of the company's main responsibilities into an asset. That is its proximity to national security institutions and involvement in the Trump administration's controversial policies, such as border security.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/tutto-pronto-per-lo-sbarco-di-palantir-a-wall-street/ on Mon, 28 Sep 2020 04:51:42 +0000.