• Palantir to make public debut via direct listing with ticker: PLTR
  • Reference price $7.25/share, banks expect $10/share, valuation of $22B
  • Provides U.S. government, private clients data analysis tools
  • Never turned a profit, revenue to exceed $1 billion in 2020

Co-founded 17 years ago by billionaire investor and vocal libertarian Peter Thiel, Palantir is finally set to hit the public markets today with ticker "PLTR" via a direct listing. The secretive company has raised $2.6 billion in the past and is part of the Big Data and data mining boom. It is slated to be one of the biggest tech IPOs of the year. (If you want to hear us talk about it, check out this week's Express podcast)

475.8 million Class A shares can be sold today (the remaining locked up, a rarity for direct listings) and the reference price is $7.25 a share, which translates to a valuation of nearly $16 billion. This is below the $10/share and $22 million market value expected, according to The Wall Street Journal. The three founders, Thiel, CEO Alex Karp and President Stephen Cohen, will have at least 49.99% voting power through their Class F shares in perpetuity even if they sell other shares.

What Does It Do

Named after the sinister seeing stones in the Lord of the Rings series, Palantir helps its clients analyze data to solve complicated problems or optimize operations by building them platforms with search features and visualizations. Its tools are primarily adopted for surveillance and security, and its biggest customers are law enforcement agencies like the FBI, CIA, and ICE, police departments and the U.S. Army. The data is often extremely sensitive or proprietary.

Financials

  • Never turned a profit before
  • Revenue 2019: $742 million, +25% year over year
  • Net loss 2019: $580 million, about the same from prior year
  • Revenue H1 2020: $481.2 million, +49% year over year (FY2020 to cross $1B)
  • Loss H1 2020: $164.7 million, -41% year over year 
  • FY2021 Revenue Growth Expected: +30%
  • Customers in H1 2020: 125 in more than 150 countries
  • Top 3 customers accounted for 28% of revenue in 2019 (listed as risk)
  • Total addressable market estimated at $119 billion
  • Biggest shareholder: Peter Thiel

Controversy

Palantir is seen as controversial because of the nature of some of the work its clients conduct, its inability to share much information on the projects and its unconventional corporate governance structure. Amnesty International yesterday said it is "failing to conduct human rights due diligence around its contracts with ICE" and "there is a high risk it is contributing to human rights violations." A new president in the White House this year could impact business if the administration's priorities shift.

Although the firm promises strict privacy measures, this is a powerful tool and there's scope for things going wrong through breaches or bad actors on the inside of organizations, Palantir itself. For example, Bloomberg reported that a security chief at JPMorgan went rogue and began spying on company executives. Palantir was helping the bank track potentially dishonest traders.

Its leadership has also distanced itself from Silicon Valley both ideologically and, well, literally, moving the headquarters to Colorado from California.