Palantir Technologies IPO – Profitable?

If it seems odd that there is a Palantir Technologies IPO in the offing for 2017 then this might be because of the secretive nature of the data mining company; after all in the past much of Palantir’s business has been with various national security organisations and a relationship of this kind is not one that attracts the attention of the casual observer. Yet a Palantir Technologies IPO was very much on the cards in the early months of 2017, and the news broke as the company was announcing that it expected to break into profitability in that same year. Indeed Palantir announced that its British operation was already showing a profit. When this news broke it seemed to be a confirmation of statements made in the previous October by co-founder and CEO Alex Karp, who predicted profitability and a public offering for 2017. If this IPO occurs then it will provide an opportunity for investors to find out more about the company’s operations, which as mentioned above, are often shrouded in as much secrecy as the operations of its major customers.  What we can say, with some degree of certainty, is that Palantir provides data mining and number crunching services, not only for governments but also for many large corporations. We can also say with some degree of confidence, that Palantir is valued at US$20 billion, making one of the most valuable venture-capital backed start-ups in the world. We might deduce that whatever exactly it is that Palantir Technologies does, it does it very well.

Another consideration to bear in mind of you are wondering about whether a Palantir Technologies IPO would be profitable or not is that the company has seemed to be diversifying away from its position as a supplier of data services to government agencies and into the wider world of business. We noted above that Palantir also provides data mining for many corporations and further exploitation of this area may be on the cards for the future, as the company moves into profitability and towards a Palantir Technologies IPO. This does not mean, of course, that Palantir will be eager to lose its strong government connections; in fact the chairman and co-founder Peter Thiel is known to be a friend of President Donald Trump; whether this will prove to be an advantageous connection is a matter that can be decided upon in the future, but potential investors wondering about the profitability of an IPO for Palantir might be reassured to remember that Thiel was also a co-founder of Pay Pal. All this being noted there are potential problems ahead for Palantir, one of which is the size of its staff of consultants. Considering the type of service that Palantir provides then the presence of a largely consultative body is inevitable but it is also expensive to retain the services of so many in demand and knowledgeable experts in their respective fields. However, all in all, Palantir Technologies did, in the early months of 2017, look set fair to enjoy a profitable IPO.

(Simon Topliss, Research)

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