Palantir just officially laid out its plans to go public in a direct listing

Palantir Technologies, the notoriously secretive tech firm, revealed registration documents for a public stock listing on the New York Stock Exchange on Tuesday, providing one of the first comprehensive looks at the company’s inner financial workings.

The public debut follows a slew of softwareinitialfilings this month, as well as two recently public Silicon Valley peers, Spotify and Slack, in going the direct listing route. No capital will be raised through Palantir’s listing, nor will any new shares be available for sale, but the move gives existing investors a pathway to selling their shares.

Palantir’s prospectus reveals 2019 revenues of $742.6 million, up 25% from the prior year, and net losses of $579.6 million. That loss has already shrunk to $167.6 million in the first half of 2020, the company said. As recently as April, the company expected to hit $1 billion in revenue this year, Bloomberg reported.

“The broader momentum of our business is the result of the strength of our software platforms,” the filing says, “and the need for software that works has never been greater.”

The prospectus also reveals high compensation for Palantir’s three executives. Co-founder and CEO Alexander Karp took home more than $12 million in salary and stock options last year, while President Steve Cohen and COO Shyam Sankar received roughly $16 million and $26 million, respectively. 

A special multi-class stock structure means that Palantir’s founders will keep a tight grip on the firm, with at least 49.99999% of the voting power so long as they maintain a certain level of ownership in the company.

In July, Palantir confirmed it had confidentially filed the paperwork with the Securities and Exchange Commission to begin the listing process. The company also moved its headquarters from Palo Alto, California to Denver, Colorado ahead of the listing.

“Our company was founded in Silicon Valley,” Karp said in a letter accompanying Tuesday’s filing, “but we seem to share fewer and fewer of the technology sector’s values and commitments.”

Cofounded in 2003 by PayPal alum and Facebook board member Peter Thiel, Palantir has grown into one of the most valuable startups in the country, with $2.75 billion in venture capital raised and valuations as high as $20 billion.  Karp, Thiel’s Stanford Law School classmate, has served as chief executive since 2004.

The company’s clients include US government agencies like the FBI, CIA, and Department of Defense, as well as law enforcement agencies around the world. Many of those connections, including dealings with Immigration and Customs Enforcement, the US agency responsible for enforcing President Donald Trump’s crackdown on undocumented immigrants in the country, have come under intense scrutiny in recent years.

Those government contracts, along with commercial clients, make up a total addressable market of $119 billion, Palantir said. 

“The challenges that we face, and the crises that we have and will continue to confront, expose the systemic weaknesses of the institutions on which we depend,” Palantir said. “Our industrial infrastructure and manufacturing supply chains were conceived of and constructed in a different century. Government agencies have faltered in fulfilling their mandates and serving the public. Some institutions will struggle to survive. Others will collapse.”  

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