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September 28, 2020

Palantir Looks to Build on Snowflake’s IPO Success


On the heels of Snowflake’s wildly successful initial public offering, investors are eagerly awaiting Palantir Technologies’ direct listing this week in what is expected to be the latest in a series of lucrative trading debuts.

Palantir, which announced plans for an IPO in July, is expected to list on the New York Stock Exchange as early as Tuesday (Sept. 29) under the symbol PLTR. The Wall Street Journal and other business news outlets expect the 17-year-old analytics firm’s common stock to list at $10 per share. That would give the company a valuation in the neighborhood of $22 billion, the Journal reported.

Others pegged the target price at $12 a share, perhaps climbing to as high as $19.

Palantir, Palo Alto, Calif., last week projected quarterly revenues approaching $280 million, up about 47 percent. Full-year revenue is forecast to reach $1.06 billion. The closely-held analytics vendor has previously raised at least $2.6 billion in venture funding.

Analysts note the IPO arrives as Palantir begins to monetize its data integration and analytics platforms. Palantir, Snowflake, cloud management specialist Rackspace Technology Inc. and others also reckon financial market sentiment is ripe for technology IPOs. Snowflake’s (NYSE: SNOW) performance, in which is stock doubled in price, reinforces that hunch.

Palantir’s direct listing differs from traditional IPOs in that it does not include a primary share offering or an offering price, market watchers noted. The direct listing includes three share classes. For example, an F share, as in Founders, ensures that Palantir’s founders, including early Facebook backer Peter Thiel, retain just under 50 percent control of the public company.

Customers for Palantir’s Gotham and Foundry data analytics platforms include U.S. government contractors spanning Defense Department data mining to COVID-19 analytics. Those systems aggregate legacy data sets, merging them onto a single platform “that combines them into a unified source,” said one industry observer.

“This is the real value-add: the breaking up of legacy information silos, and Palantir claims to be able to do this better than competitors,” the analyst added.

“IT administrators and security professionals on the front lines shouldn’t have to sift through multiple tools to get the full picture they need,” added Trevor Daughney, Exabeam’s vice president of product marketing.

“Palantir, and other complementary companies in the technology space, pull all relevant information into one platform, getting the right data to the right people quickly,” Daughney added.

Observers identified at least once down-side risk in the Palantir IPO: that the data analytics vendor with close ties to government agencies could become enmeshed in the emerging U.S.-China technology Cold War.

“Is it possible that China makes a tit-for-tat move, and declines to do business with companies using Palantir?” asks one observer. “The answer is yes, this is a real possibility in my view.”

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