Palantir Plans Direct Listing for Late September

Palantir Technologies Inc. is planning to go public through a direct listing of its shares in late September, according to people familiar with the matter.

The company, which sells data analysis software used by governments and large companies worldwide, might still change its plans, said the people, who asked not to be identified because the information wasn’t public.

A company spokeswoman declined to comment.

A direct listing would allow the company’s current investors to sell their shares on the first day of trading rather than having to wait for a lock-up period to expire, as would be required in a traditional initial public offering. Unlike an IPO, though, the company doesn’t raise capital in a direct listing.

Palantir is in the process of raising $961 million, $550 million of which it has already secured, according to a July filing with the U.S. Securities and Exchange Commission. That includes a $500 million investment from Sompo Japan Nipponkoa Holdings Inc. and $50 million from Fujitsu Ltd.

Those sums make listing the stock directly a more accessible path for Palantir, following in the footsteps of Spotify Technology SA and Slack Technologies Inc.

Billionaire Peter Thiel founded Palantir in 2003 with a group of business partners including Alex Karp, the chief executive officer. In 2015, Palantir reached a valuation of $20 billion, though in recent years stockholders have sold blocks of shares for much less.

The company told investors this year that it expects to break even in 2020 on revenue of about $1 billion.

In June, Palantir added three directors including the first woman to serve on its board, former Wall Street Journal reporter Alexandra Wolfe Schiff.

Dozens of law enforcement and government agencies around the world use Palantir to compile and search for data on citizens with the intent of combating crime, hunting terrorists and, in recent months, tracking the spread of Covid-19. The pandemic has boosted business as companies use its products to help determine how to reopen.

Palantir is controversial for the way its tools have been used by some to enable surveillance and compromise privacy. Its use by police and immigration officials, in particular, has sparked numerous protests.

The Palo Alto, California-based company had long resisted a public offering to avoid getting valued as a consultancy, and to stay out of the public eye while it reduced its dependence on engineers customizing software for each client and worked toward profitability, people familiar with the matter have said.

The company said in a statement in July that it had filed with the SEC for a “public listing” of its stock, wording that has been used by other companies planning to pursue a direct listing instead of an IPO.

Palantir’s funders include Founders Fund, the venture capital firm started by Thiel. Other investors include Morgan Stanley, BlackRock Inc. and Tiger Global Management.

©2020 Bloomberg L.P.

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