Another day, another IPO announcement.
Data analytics company Palantir Technologies has filed to go public through a direct listing. The initial public offering (IPO) is expected to be one of the biggest market debuts of the year.
The company, which was founded in 2003, unveiled losses that are likely to test the appetite of capital market investors who have shown an increasing wariness of backing loss-making start-ups, most notably WeWork, which botched its IPO last fall.
Palantir reported a net loss of $580 million in 2019, about the same as its loss in 2018.
Revenue came in at $742 million last year, compared to $595 million in 2018. For the first six months of 2020, the company posted revenue of $481 million, up 49% from the year-earlier period. The company expects revenue in 2020 to grow to $1 billion.
However, the company also revealed that it has never been profitable in nearly 20 years of being in business.
As opposed to a traditional initial public offering, a direct listing does not raise fresh funds. In a direct-listing model, existing investors get to sell their shares. Palantir, which derives its name from a magical artifact in "The Lord of the Rings," specializes in analyzing large quantities of data. The company is viewed as a technology firm from Silicon Valley. However, the company recently announced plans to move its headquarters to Denver.
Palantir Chairman Peter Thiel is known for his technology investing credentials as a co-founder of both PayPal and Facebook. Thiel was also an early investor in LinkedIn and part of the so-called "PayPal Mafia" in Silicon Valley, referring to a group of highly successful entrepreneurs who went on to invest in prominent technology start-ups.
Morgan Stanley, Credit Suisse and Goldman Sachs are the investment banks managing Palantir’s public listing.
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