Peter Thiel, a well-known venture capitalist, is also the Chairman of Palantir Technologies (PLTR). Barron’s reported that Thiel filed to sell up to $1 billion of his PLTR stock.
Palantir shares broke out earlier this month. It closed at $35.59 on September 13, after settling at $30.00. The S&P 500 (SPY) is adding the AI software firm to the index, along with Dell Technologies (DELL). In June, the widely-held index added CrowdStrike (CRWD), KKR, and GoDaddy (GDDY).
Risks
Retail investors should not ignore Thiel’s plans to sell. Risks are higher than usual. Valuations in the technology stock are not sustainable. Their rise also lifted PLTR stock in the last two years. As long as the AI hype does not fade, however, the stock should hold its price level.
Thiel’s potential sale is worth around 30% of his stake in the company. He took two decades to build the firm but did not cash out much in that time.
Amazon (AMZN) co-founder Jeff Bezos sold AMZN stock in batches recently. But his sales are only a small percentage of the total.
Scalability limitations are another risk. In 2024, Palantir will report around $2.7 billion in revenue. That is a $5 million ACV per customer (based on 550 customers).
Enthusiastic analyst upgrades are a risk. B of A, for example, set a $30 price target in early August. A month later, the price target increased to $50.
