|Bid||0.00 x 3200|
|Ask||0.00 x 800|
|Day's Range||243.05 - 278.26|
|52 Week Range||208.55 - 319.00|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||175.00|
(Bloomberg) -- Palantir Technologies Inc. fell 5% from its opening trades in its debut as a public company, ending a 17-year tradition of secrecy surrounding the software business co-founded by Peter Thiel.The data analytics company’s share price fell to $9.50 after opening Wednesday at $10 on the New York Stock Exchange. Palantir listed its shares directly on the exchange, rather than raising capital through an initial public offering. As in the three other major direct listings that have taken place, the exchange had set a reference price -- $7.25 for Palantir -- to help guide investors and to allow shares to begin trading.Palantir ended the day with a market capitalization of about $15.7 billion based on its listed shares, according to data compiled by Bloomberg. On a fully diluted basis based on all the shares covered in its filings, the company has a value of almost $21 billion, in line with the $20 billion valuation private investors awarded it in 2015.Going public was the right decision for Palantir, Chief Executive Officer and co-founder Alex Karp said in an interview, without commenting directly on the first day’s trading.“We didn’t need to change our culture,” he said, referring among other things to Palantir’s tight group of insiders and their support for the programs run by U.S. government agencies. “I feel really good.”Karp, Thiel and a tight-knit group of leaders will retain tight control of the company through a three-tiered share structure and voting rights. That’s needed to assure customers -- some of them controversial -- that they can trust the company, Karp said.“It gives our clients enormous comfort that we will stand by them when times are good and when times are bad,” Karp said. “We support some of the most clandestine operations in the world.”Companies are racing to go public in the U.S., where investors are welcoming new stocks ahead of a presidential election likely to drive volatility. Companies raised $61 billion from initial public offerings this quarter, the busiest on record, according to data compiled by Bloomberg. Software businesses were at the forefront of the listing boom. Snowflake Inc., the largest of them, raised $3.9 billion including so-called greenshoe shares in its IPO this month.Asana Inc., a software company backed by Thiel’s venture capital firm Founders Fund, also went public Wednesday through a direct listing, an unconventional mechanism for taking a company public. Asana’s shares gained 6.7% from their opening price, giving the company a value of about $5.5 billion on a fully diluted basis.Palantir traveled a long and sometimes rough road to its public debut. Thiel helped start the company in 2003 with early funding from an arm of the U.S. Central Intelligence Agency, but Palantir’s darling status among U.S. government agencies didn’t translate into success with businesses for well over a decade.Named for the all-seeing stones in the fictional “Lord of the Rings” trilogy, Palantir combines myriad, ever-changing data streams into one centralized “source of truth.” Customers, including the U.S. Defense Department and pharmaceutical giant Merck KGaA, then mine that information and analyze it to make decisions. The results are presented as a series of spiderweb-like visuals, making information accessible to non-technical users.For years, Palantir operated much like a consultancy, dispatching its engineers to customer sites to implement the software and build one-off applications. The model was expensive, and Palantir incurred heavy losses for most of its history. The business remains unprofitable.When Palantir built a new software platform, Foundry, in 2016, the company cut costs by automating much of the grunt work and said it reduced time to set up customers from months to days. Palantir expects to deliver an adjusted profit this year on more than $1 billion in revenue.Competition for global customers will be fierce. Palantir only began building a sales team in 2019. The company currently has about 125 customers, with the U.S. Army being the largest representing 15% of revenue.Palantir’s chairman, Thiel, and its work for government agencies including U.S. immigration have sparked concerns among corporate watchdogs and human rights groups including Amnesty International. The company has also drawn rebukes from governance experts who point out that Thiel will have power with little accountability because of multi-class stock that grants him outsize power in perpetuity.Palantir followed other tech companies in its decision to bypass a traditional IPO. Spotify Technology SA went public through a direct listing in 2018 and Slack Technologies Inc. followed last year.In a direct listing, employees and other shareholders can sell stock without the company issuing new shares to raise capital. Slack and Spotify each soared on their first day of trading, reaching valuations of $19.5 billion and $27.8 billion, respectively.(Updates with CEO’s comments in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- In a hot market for new technology stocks, it was Palantir Technologies Inc.’s turn in the spotlight on Wednesday. The debut wasn’t a complete show-stopper, and that’s fine — not everything can, or should, be a market darling. The data-mining company, co-founded by billionaire and Donald Trump supporter Peter Thiel, went public through a direct listing and started trading at $10, above the New York Stock Exchange’s $7.25 reference price. A $10 price equates to a market value of about $22 billion on a fully diluted basis, which, while respectable, isn’t much higher than its last private fund-raising round in 2015 at $20 billion. Palantir traded as high as $11.42 on Wednesday before drifting back under $10 to close at $9.50.Investors have been clamoring for new tech listings despite high stock valuations and the potential dampening effect of a second-wave virus outbreak. According to Renaissance Capital, the U.S. IPO market is on track to have its most active third quarter since the dot-com era two decades ago, with nearly 80 deals set to raise about $29 billion in total. One offering earlier this month — the fast-growing data-warehousing company Snowflake Inc. — skyrocketed from the start and has already more than doubled in price, making a tidy paper profit for investors including Warren Buffett’s Berkshire Hathaway Inc. Palantir’s more muted reception shows investors can be discerning even in frothy times. (Another tech direct listing, Asana Inc., also began trading above its reference price on Wednesday, settling in at about $29 after opening at $27.)Palantir was initially formed to help government intelligence and military agencies automate their surveillance capabilities and has since expanded to assist companies in combing through data for business insights. The company’s name comes from the crystal ball used in J. R. R. Tolkien's “Lord of the Rings,” but management may have a hard time selling investors on its vision of the company’s prospects.Ahead of the listing this month, Palantir executives gave a rosy financial outlook, forecasting about $1 billion in sales and an adjusted operating profit excluding stock-based compensation for this year — a first after more than a decade of large annual losses. They also project robust revenue growth of more than 30% next year as well. Further confirmation of this upbeat line came late Tuesday, when the Defense Department announced it awarded a $91 million contract to Palantir for the Army Research Laboratory.Palantir, though, may be underestimating the potential impact of the dramatic changes underway in the cultural and political environment following this year’s wave of nationwide protests over racial injustice. The company’s clientele has included several city police departments and the Department of Homeland Security, according to Bloomberg News, and scrutiny over the use of its data-mining software by federal and local law enforcement agencies is certain to rise on the back of privacy and profiling discrimination concerns. To illustrate, on Monday Amnesty International criticized Palantir’s work with Immigration and Customs Enforcement, saying there was "high risk” its software may be contributing to human rights violations of migrants and asylum-seekers. Palantir didn’t respond to a request for comment on the report.The November presidential election could also have serious consequences for Palantir. In late August, when it first filed for a stock listing, I noted at the time that the company explicitly warned in its prospectus that changes in "agency leadership positions in connection with the 2020 presidential election” may hurt its business. It’s easy to see how any tailwinds from having a Trump supporter as co-founder could easily turn into headwinds with a Trump loss.That wouldn’t be ideal for Palantir as the government segment is still a critical driver for its growth. Last year, the company’s sales to government entities accounted for about half of its revenue and grew at more than double the rate of its commercial business. And then there is customer concentration risk. While best-in-class cloud software firms like Snowflake have a diverse array of thousands of customers, Palantir’s client base totals just 125, with the largest 20 customers accounting for two-thirds of its revenue last year. Losing one or two key customers would be a significant blow to its financials. So with Joe Biden rising in the polls against Trump, it becomes increasingly problematic for Palantir’s prospects. A Democratic administration will likely have far different funding priorities and civil liberty guidelines for government programs compared with the current one. The next four years may be far more difficult even for a company named after an all-seeing magical stone.(The second paragraph was updated with Palantir’s closing price.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Cybersecurity software maker McAfee Corp. has filed to go public, adding to the roster of companies rushing to cash in on a hot market for U.S. initial public offerings.The San Jose, California-based company listed the size of the offering as $100 million in a filing Monday with the U.S. Securities and Exchange Commission. The amount is a placeholder that will likely change.McAfee’s planned offering is part of a software IPO boom this year. The biggest listing for an operating company on a U.S. exchange is software maker Snowflake Inc., which raised $3.86 billion including so-called greenshoe shares this month.Software companies account for $12.8 billion of the $102 billion raised this year on U.S. exchanges, according to data compiled by Bloomberg. Shares of those newly public software companies have gained 78% on an weighted average basis, the data show.Intel, TPGMcAfee was previously a unit of Intel Corp. which bought the software maker in a $7.7 billion deal that closed in 2011.The chipmaker argued that security was becoming increasingly important to computer users and that integrating security functionality into its processors would add to their value. That high-level justification for the purchase was never translated into practical applications which enhanced Intel’s main business. The unit continued on primarily as a retail software vendor not connected tightly to its parent’s offerings.In 2016, Intel announced that it had signed a deal to transfer a 51% stake in the business to TPG for $1.1 billion. The transaction valued the spun-off company at $4.2 billion, including debt. TPG and Thoma Bravo are listed as McAfee’s backers in Monday’s prospectus.For the 26 weeks ended June 27, McAfee had a profit of $31 million on revenue of 1.4 billion, according to its filing. The company said it lost $146 million on revenue of $1.29 billion during the comparable period last year.Morgan Stanley, Goldman Sachs Group Inc., TPG Capital, Bank of America Corp. and Citigroup Inc. are leading the share sale. McAfee plans to list on Nasdaq Global Select Market under the symbol MCFE.(Updates with financial results in eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.