Bloomberg Continues to Needle Palantir Technologies
February 1, 2019
Buzzfeed once was a good source of anti-Palantir Technologies’ information. But change is constant. Now Bloomberg finds news in the company that tries to keep a low profile.
Palantir Technologies, as you may know, is a firm which is a search and retrieval system on steroids. One can use the system to find an entity amidst the process content. If search doesn’t work, the firm has bundled a range of software modules to identify those elusive facts an investigator, a financial analyst, or a drug researcher seeks.
Bloomberg’s “Palantir Slashes Its Own Stock Price to Boost Morale” reports that employees are a bit unhappy. The company is 15 years old, and not really a start up. The firm’s technology is a bit long in the tooth as well. Big systems are difficult to reengineer to keep up with the waves of newcomers. For example, I am not sure a comprehensive list of Palantir-like start ups in Israel exists. I have lists, but these are far from complete. Ever hear of Narrative Science?
The write up points out that Palantir’s high valuation has begun to slump, like the eyesight of a teen who has played video games for a decade every night for five hours in his or her bedroom.
The main point of the write up strikes at the soul of the Silicon Valley capitalist: “The stock adjustment raises an important question: What is Palantir worth?”
The answer is that search centric companies, regardless of how they are packaged, lack the ability to generate cash in the manner of Facebook, Google, or, praise the Austrian economists, Amazon.
This Bloomberg statement casts a shadow over Palantir and its management team:
Because Palantir typically offers lower salaries than many nearby tech companies, equity is a big part of the sell. But the stock options were overpriced, according to Palantir shareholders and prospective investors. All seven mutual funds that own Palantir shares have slashed the value of their holdings since their 2015 high of $11.38. SP Investments Management values Palantir at $7.87 a share as of September, the most recent data available. Morgan Stanley’s mutual funds have decreased prices seven times in three years, to $2.49.
Employee unrest, poaching of staff, and financial fancy dancing are routine in Silicon Valley. Why target Palantir? That’s a question which I find more interesting than why the company is trying to keep employees happy?
The answer, “Real news.”
Stephen E Arnold, February 1, 2019
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