Palantir (PLTR) is expected to begin trading on Wednesday, September 30th 2020. Some are already calling it better than Snowflake (SNOW).
Palantir’s IPO papers were leaked in late August. Ironically, Palantir is known for its secrecy, with a lot of speculation, but not a lot of answers. They collect data for big clients — like banks and governments — and filed for an IPO in July.
With a $20 billion valuation, and clients like Merck, Airbus, and Ferrari, we’d expect some impressive financial metrics. The opposite is true. Here are 3 big surprises in the leaked documents:
- They have just 125 clients.
- They have under $1bn in yearly sales ($742M in 2019, below estimates).
- They reported a $580M net loss in 2019.
To help shed light on the potential outcomes of these upcoming IPOs, I look at data on the past IPOs of 7 other data companies:
Splunk (SPLK). IPO April 19, 2012. MongoDB (MDB). IPO Oct 19, 2017. Elastic (ESTC). IPO Oct 5, 2018.
Since its IPO, Splunk’s daily closing stock price has an r² of 0.96 with the New York Times’ daily closing stock price. This may be because they’re both “data storytelling” companies (just take a look at NYT if you’re not a reader already), and large investors may have them in the same portfolios — so the buy and sell movements are similar.
Splunk and the NYT may also have ties we’re unaware of. Splunk has 7 features on the NYT, for instance.
Another way to play Palantir’s IPO
Another way you can play Palantir’s IPO is to buy the stock of one of the biggest holders, in this case Sutter Rock Capital (SURO) we have already wrote about this and highly suggest you research it before Wednesday.