- Palantir is a unique company for many reasons that are not appreciated.
- Recent events are probably creating strongly positive price action.
- Volatility is likely in the short run, but long term, PLTR has potential.
- Investors might see a controversial similarity between PLTR and AMZN.
I went long on Palantir (NYSE:PLTR) on September 30, 2020. My cost basis is just over $10 per share. It’s a good size position in relation to the rest of my portfolio, so I have skin in the game. And, because I’m long and wish to make money, I am biased. Fair warning.
There have been several articles about PLTR, but there’s one thing missing that I think is important to realize in the broader picture. I promise I’ll get to that factor in just a minute. First, let’s very quickly review some basics.
- PLTR decided to list direct versus taking the traditional IPO route. Direct listings don’t raise new capital. They only involve the sale of existing shares. So, “insiders” are selling direct to the public.
- PLTR is not yet profitable. They’ve lost nearly $600 million in both 2019 and 2018. However, they are targeting about $1.05 billion in revenue for 2020, with non-GAAP operating income (excluding stock-based compensation and some other major line items) of $116-126 million. We’ll see.
- PLTR is secretive and controversial. For example, the company has received financial backing from the CIA. Cue the mysterious music.
- PLTR has a convoluted voting structure. True power goes far beyond ownership, due to rights attributed to different share classes.
In addition to these factors, PLTR was founded by Peter Thiel, who’s a member of the PayPal Mafia. He’s a controversial figure associated with various political figures, including Donald Trump. That said, he strongly believes in personal rights and tends to classify himself roughly as a libertarian.
There’s also Alex Karp who’s practically “at war” with Silicon Valley. He feels that Silicon Valley elites, especially technology leadership, have let down the USA. This aligns with Peter Thiel’s comments that Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is “seemingly treasonous” and ought to be investigated by the CIA and FBI.
