DealBook: Take It or Leave It

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Palantir’s chief on stocks and social activism

The data-mining consultancy successfully went public yesterday, getting a valuation of more than $20 billion by directly listing existing shares on the New York Stock Exchange, rather than raising new money with an I.P.O. Palantir’s co-founder and C.E.O., Alex Karp, spoke with Andrew about the debut.

On going public without a traditional I.P.O.:

“With a listing, you can still kind of keep your culture,” Mr. Karp said. “We didn’t bring in the super-experienced but culturally foreign ‘A’ players. We were doing it with people at Palantir.”

On his tight control of Palantir through special classes of stock:

“I think the control structure has to be tethered to a philosophical or mission bent that is deeply intertwined in the company,” he said, adding that a justification of “We’re the founders, take it or leave it” wasn’t satisfactory. He added, “I also think that many people believe that over the long haul, it may be better to invest in a founder-driven company — that the co-founders may look odd, but the results may be really good. And I kind of share that bias.” (For more on Palantir’s unique governance model, check out the Deal Professor below.)

On the debate about companies embracing, or rejecting, social activism:

“Companies should really articulate what they stand for, and then investors should get to judge whether they want to be involved in that company,” Mr. Karp said. “If you’re a consumer internet company, you should say, ‘We believe that monetizing your data is a really good commercial model and it makes people happier because they get free communication services on the back of the fact we can influence their behavior.’”

Article source: https://www.nytimes.com/2020/10/01/business/dealbook/palantir-direct-listing.html