Image: Dan Taylor / Heisenberg Media / CC BY
Back in July, Palantir Technologies confidentially filed paperwork with the U.S. Securities and Exchange Commission (SEC) to go public.
The confidential IPO filing allowed Palantir to bypass traditional filing mechanisms so it doesn’t have to give insights into their inner workings such a financial figures and potential risks.
This strategy has recently been used by other tech giants who went public recently, including Spotify, Slack, and Uber.
A short 10 weeks later, and Palantir is ready to trade publicly for the first time as a direct listing.
That means the company will not be raising any new money. Instead, existing shareholders will be allowing to sell their stock to new investors.
Palantir stock will begin trading on the New York Stock Exchange on Wednesday, Sept. 30 under the ticker symbol “PLTR”.
It’s expected to begin trading for around $10 per share at a $22 billion valuation.
I believe Palantir is going public now for a couple reasons:
First, the markets have been very receptive of new tech IPOs in recent months. Just look at what happened with Lemonade Inc. (NYSE: LMND)…
The stock jumped 139% on its first day of trading back in July. That indicates demand is high for new tech IPOs.
Second, Palantir’s revenues are exploding right now – which I’ll explain more in depth below.
Here’s everything you need to know to make an informed decision about the company before it goes public…
A Fundamental Analysis of Palantir
Two things I look for when determining whether to buy a new stock are: strong leadership/management and competitive advantages in a big market that can’t easily be replicated by another company.
Benjamin Graham/Warren Buffett-style value investors call this having a “wide moat.”
And Palantir Technologies checks both of these boxes…
Founded by billionaire investor and entrepreneur Peter Thiel in 2003, Palantir’s mission is to help people and institutions solve hard problems and change the world for the better with good data and the right technology.
Palantir collects big data from public and private databases and uses artificial intelligence to analyze the information it gathers. The proprietary AI technology the company engineered itself gives it a wide moat over its competitors.
When it comes to allocating capital and signing massive profit-driving clients for Palantir, I have no question that Peter Theil is the best man in the world for the job.
In 1998, Theil co-founded PayPal with LinkedIn’s Reid Hoffman, Tesla’s Elon Musk, YouTube’s Jawed Karim, and more.
So, he knows a thing or two about running a tech company and how to surround himself with the best and brightest engineers possible.
Thiel’s also one of the most successful venture capitalists of all time. He made the first outside investment in Facebook (NASDAQ: FB), where he still serves as a director. And he provided early funding for LinkedIn, Yelp, SpaceX, and Airbnb – just to name a few.
Related: Would You invest in SpaceX?
The relationships Theil has with the leaders in tech, general business, and the government have led to Palantir signing many high-profile clients…
Some of Palantir’s largest customers include Morgan Stanley, Merck, Airbus, Fiat Chrysler, state and local governments, and even some federal agencies like the Department of Defense (DOD), the Central Intelligence Agency (CIA), and the National Security Agency (NSA).
Palantir was even hired by the Centers for Disease Control (CDC) for the coronavirus pandemic we’re currently facing…
With approximately 125 customers in 36 industries spanning more than 150 countries, it’s clear Palantir is winning lots of new business. They’re also winning more business from old customers.
A Technical Analysis of Palantir
Palantir anticipates revenue growing 42% in 2020 to about $1.06 billion, according to its most recent filing last week. That would represent a 17% increase of its 2019 figures, when sales grew 25% to $742.6 million.
And in 2021, the company projects better than 30% revenue growth.
With growth like that for a tech company managed by some of the brightest entrepreneurs and venture capitalists in the world, there’s going to be a lot of investor demand for PLTR shares on Wall Street come Wednesday.
Here’s my Palantir IPO price target…
Don’t get caught up in all the hype and pay too much more than $10 per share if you can help it.
If the stock opens up at $12 or more, wait for a pullback or place a limit order at $10 per share. Be patient, you don’t necessarily have to buy on IPO date.
If you are able to scoop shares up for $10 or less, I think you could reasonably expect to see your shares jump 50-100% to $15-$20 within the next 12 months.
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