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Secretive Big Data Firm Palantir Makes Low-Key Stocks Debut

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Key Points

  • Data analytics firm Palantir, which has drawn fire over its law enforcement and national security work, made a low-key debut Wednesday on Wall Street at a hefty valuation of more than $20 billion.
  • Palantir, whose name comes from the mystical, all-powerful seeing stone in “Lord of the Rings,” opted for a direct listing which raises no new cash but allows its shares to be traded publicly.
  • The shares opened in the early afternoon at $10, representing a market value of some $21.7 billion—close to its valuation by private investors. 
  • Visit The Financial Today’s homepage for more stories.

New York, United States — Data analytics firm Palantir, which has drawn fire over its law enforcement and national security work, made a low-key debut Wednesday on Wall Street at a hefty valuation of more than $20 billion.

Palantir, whose name comes from the mystical, all-powerful seeing stone in “Lord of the Rings,” opted for a direct listing which raises no new cash but allows its shares to be traded publicly.

The debut came without fanfare, as the trade opened with no splashy bell-ringing event for Palantir, using the symbol PLTR, at the New York Stock Exchange.

The shares opened in the early afternoon at $10, representing a market value of some $21.7 billion—close to its valuation by private investors. 

After some swings higher, Palantir ended at $9.50, making its value slightly above $20 billion.

The company, created in Silicon Valley and recently relocated to Denver, has argued that its tech platform helps catch terrorists and keep people safe.

But some activists argue that Palantir’s technology—which scoops up financial records, social media posts, call records, and internet records—enables unprecedented opportunities for mass surveillance with little oversight on privacy and fundamental rights.

Amnesty International said in a report this week that Palantir’s contracts with US authorities to target asylum seekers “raise serious questions about the company’s actions to uphold its responsibility to respect human rights.”

The report said Palantir “has a responsibility to avoid causing or contributing to human rights abuses, and to address human rights impacts in which they are involved” under United Nations guidelines.

Responding to the Amnesty report, Palantir said it has no contracts with US Customs and Border Protection and claimed it was the subject of “misreporting and conflation” of its activities.

In its prospectus, Palantir said it offers software to defense and intelligence agencies “whose missions are to keep us safe,” while adding that it steers clear of data tracking used by other large technology firms.

“Our software is used to target terrorists and to keep soldiers safe,” the company said. “We have chosen sides, and we know that our partners value our commitment.”

Tracking bin Laden

Founded in 2003 in response to the September 11, 2001 terror attacks, Palantir got initial funding from a CIA venture-capital unit.

Its predictive analytics reportedly helped the US military locate Osama bin Laden and track weapons movements in the Middle East.

Its platform has also been used in the controversial practice of “predictive policing” to help law enforcement, detect medical insurance fraud, and fight the coronavirus pandemic.

While Palantir’s data practices and algorithms are secret, the company claims it follows a roadmap which is, if anything, more ethical than its tech sector rivals.

It moved its headquarters to Denver this year, partly in an effort to set itself apart from its Silicon Valley rivals.

“From the start, we have repeatedly turned down opportunities to sell, collect or mine data,” it said.

One source of controversy for Palantir is co-founder and large shareholder Peter Thiel, an early Facebook investor and one of the rare tech executives who backed Donald Trump’s campaign in 2016.

Chief executive Alex Karp, a self-described socialist, has brushed aside criticism of the company, saying technology firms should not be in charge of public policy.

The listing will lead to fresh scrutiny for Palantir, which posted a loss of $580 million last year on revenue of $743 million. 

One question for investors is an unorthodox governance system.

Independent technology analyst Richard Windsor says the company will have “a voting structure that overwhelmingly favors its founders, ensuring that public investors are at great risk of paying the economic price of bad decisions over which they have no say.”

Palantir’s Class B shares held by founders will have ten votes to one for the Class A stock along with a new category with variable voting power. 

“This result is that until all of the founders have died, the remaining founders will have complete control of this company and other shareholders will have none,” Windsor said on his Radio Free Mobile blog.

Story by Juliette Michel with Rob Lever

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