Investors were eager to pounce on Palantir’s IPO back in 2019. But before the IPO launched, Palantir pulled back, taking investor’s hopes and dreams with it. Ever since, investors have speculated the IPO would happen in 2020. However, there may be new evidence that says differently.
Palantir is a secretive company due to its line of work. Yet new information following the IPO pullback could shed light on the situation.
After all, if this unicorn launches an IPO, investors want to be ready. It might be a great investment opportunity. But first, what is Palantir?
Palantir IPO: What The Business Does
Palantir is an American software company that specializes in big data analytics. Billionaire Peter Thiel and CEO Alex Karp founded the company in 2004. If you’re familiar with Silicon Valley, you know Palantir is a big player in the high-tech game.
The company creates software that manages, analyzes and secures data. It finds useful patterns. There are connections hidden within piles of data, such as phone records, addresses and credit transactions. And as our world becomes more connected, we collect more data. This pushes demand for Palantir software higher.
In recent years, Palantir has branched out to work with corporations. However, most of its work is with government agencies. In December, the company announced a $110 million contract with the Army. It will be part of a four-year program totaling $440 million. And according to media reports, Palantir’s technology aided the capture of Al-Qaeda leader Osama bin Laden.
With that in mind, you might be wondering…
Why Was the Palantir IPO Delayed?
There are a couple rumors around the data mining company’s IPO delay. One thing to take into consideration is the large failures of some notable 2019 IPOs. That includes companies like Uber, Lyft and Peloton.
In fact, almost half of all 2019 IPOs are trading below their offer price. Because many of them were highly anticipated by investors, their failures were a disappointment. And Palantir wouldn’t be the only company to put that factor into play. WeWork, another anticipated 2019 IPO, also postponed its launch to the public market.
Moreover, despite having government contracts, Palantir has never actually turned an annual profit. That means it’s hard for investors to predict yearly, or even quarterly, revenue. And that’s not the only concern some investors have.
Thanks to its immigration-related work, the ethical use of its technology has come into question. Palantir’s employees are speaking up about the involvement in immigration policy enforcement.
But those aren’t the biggest reasons why insiders delayed the Palantir IPO.
In 2015, a round of private funding gave Palantir a valuation of $20 billion. Now, Palantir Technologies hopes to reach a value of $26 billion. To do this, it aims to raise $1 to $3 billion. The company has turned to foreign investors to reach this goal. Delaying Palantir’s IPO gives the company time to negotiate. It can also reach out to other venture capital investors. This might make the rumored IPO a better investment opportunity than originally thought.
So the golden question…
Will Palantir IPO in 2020?
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On September 30, 2020, the Palantir IPO priced at $7.25. The company sold over 257 million shares in the offering for a deal size of $1.86 million. Palantir stock trades on the NYSE under the ticker symbol PLTR.
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