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The eye of Sauron will turn toward Lower Manhattan today as Palantir goes public on the NYSE. It’s expected to be valued at around $22 billion, the WSJ reported last week.
What’s Palantir?
Either a software company that works with government agencies or a
defense contractor in Allbirds, depending on how you look at it.
- Palantir guzzles up
surveillance data on things like troop movements, IED attacks, and
Covid-19 cases and presents it to users in a super-slick interface.
- Those users are almost
all government employees at agencies such as the NSA, the CIA, and the
Department of Health and Human Services.
Cofounder and CEO Alex Karp says he’s not like other tech founders—he’s been critical of what he calls a liberal “monoculture” in Silicon Valley...so he left. Palantir moved from Palo Alto to Denver last month.
The bull case: Palantir
found its spot in the government contract biz by way of a marketing
strategy that is no less creative for the feathers it ruffled: offering
free services to soldiers, then letting word travel up the chain of
command. It keeps those contracts flowing with close ties to the Trump
administration via cofounder and famed venture capitalist Peter Thiel.
The bear case: Palantir is 17 years old and still isn’t profitable. Plus, it’s reportedly losing favor
in the intelligence and national security communities, and its plans to
branch out into police and private-sector partnerships have mostly
flopped.
We may be in for some chaos
Both Palantir and workplace management tool Asana are listing directly on the NYSE today, meaning they won’t actually raise money from going public.
Because they
cut out investment banks’ underwriting fees, direct listings are an
increasingly popular method. Spotify hit the markets via direct listing
back in 2018, and Slack did the same last year. The option has its
benefits, but can cause volatility since it takes a while to settle on a
price.
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