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Jim Cramer on Palantir Going Public

Jim Cramer discusses direct listings and when he's liked them in the past.

Palantir Technologies, which sells data-analytics software filed a Form S-1 with the Securities and Exchange Commission to register for an initial public offering, a media report says.

In the filing, Palanatir revealed that it plans to list on the New York Stock Exchange under the ticker PLTR, and will pursue a direct listing rather than a traditional IPO. 

The company, which sells software to aggregate big data for governments and corporations worldwide, has been mulling a public offering for more than a decade. The company’s analytics were credited with helping the U.S. government capture Osama bin Laden.

Despite its high profile, Palantir has had difficulty turning a profit, according to reports. The direct-listing route is a way to monetize the value of its existing stock, currently in the hands of employees and other private backers, without going through the more expensive listing process that involves investment banking fees.

The company reported revenue $742.5 million in 2019 alongside a net loss of $580 million. In the prior year, its sales were $595.4 million with a net loss of $580 million. In the first half of this year, Palantir brought in $481.2 million in revenue and lost $164.7 million. 

It reported 125 customers in the first half of 2020, a group that includes the U.S. Army and other government agencies. It cautioned that just three large customers made up 29% of its revenue as of June 2020, with a single government customer accounting for 11% of its total revenue in that period. Another large commercial customer made up an additional 10% of its revenue.

The filing indicated that Palantir generally does "not enter into business with customers or governments whose positions or actions we consider inconsistent with our mission to support Western liberal democracy and its strategic allies.”

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