Palantir announced its intentions to go public via a direct listing on the New York Stock Exchange and trade under the symbol, PLTR. In recent years, the traditional IPO route has been disrupted.
Some private companies are going public via SPACs, and others are going public through direct listings which is what Slack Technologies (Nasdaq: WORK) and Spotify (Nasdaq: SPOT) did. A direct listing is a way to go public without any intermediaries or underwriters.
All About Palantir
Palantir is a data analytics company that mainly serves governments and corporate clients. Its goal is to keep people safe by mining public and private data for signs of threats. It was founded by Peter Theil in 2004 and has been under controversy as some of its practices have been called out as unethical.
For most of its life, it's been operating under a shroud of secrecy, so its S-1 revealed some interesting details about the company. Palantir is seeking a valuation of $26 billion. In 2019, the company lost $580 million. In the first half of 2020, it lost $165 million. Revenue growth is around 25% on a year over year basis.
Its government business accounted for 54% of revenue and is growing 76% year over year. Its customers include various branches of the military and government departments. Palantir's primary product is assembling and organizing vast troves of data that are updated in real-time and allow it to be displayed, compared, and sorted in useful ways by clients.
Palantir's share structure follows the same format as other tech companies which seek to keep power with the founders and management. Shares will be split into Class A and Class B. Each share of Class A gets one vote, while Class B gets 10 votes.
There will also be Class F shares that get a variable amount of votes. Currently, Thiel has 30% of Class B shares. In total, Thiel, co-founder Stephen Cohen, and CEO Alex Karp are expected to have 50% of voting power, so they will have the final say on any major decisions.
Palantir's Controversies
Palantir has had a number of controversies. The company has distanced itself from Silicon Valley by moving its headquarters to Colorado in protest of the state's policies. Additionally, it has stated that its mission is to protect people and governments, while most of Silicon Valley is about "selling advertising".
Some other controversies include its lawsuit with I2 which accused Palantir of stealing its code and using it in its algorithm. Palantir settled this matter out of court. Palantir has been accused of using data illegally obtained by Cambridge Analytica during the 2016 campaign. It's also been under fire for developing software that was used by ICE to detain and deport migrants.