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Palantir headed for $22b valuation: RPT

Yahoo Finances On the Move panel discuss the latest news that Palantir is expected to be valued at nearly $22 billion in trading debut.

Video Transcript

JULIE HYMAN: Well, one of the hotly anticipated stock debuts is coming next week. It's not an IPO, it's a direct listing, and it is Palantir. There's a new report that says we could see a market valuation of about $22 billion for that company. It is set to start trading, what, next Wednesday, I believe.

Dan Howley, there have been a lot of questions, of course, about Palantir. What's also interesting is not only the huge valuation, but also the structure in which it's coming to public market, not just its direct listing, but that the people who run the company are going to have a lot of power.

DAN HOWLEY: Yeah, that's one of the strange things about this listing, is how much they'll have as far as voting shares. It doesn't seem as though the folks who end up purchasing shares in the public market will have much to say about anything.

This is a company, I think, that people still don't fully understand what it does. I think it's basically just kind of understood as this nebulous being that is able to suck up data and then figure out crime. But there's really two parts to Palantir. There's a section called Gotham, which is their first product, and there's their product called Foundry.

Now, Gotham is the one that people always talk about, because it's what's used in the DoD. It's been used, as Alex Karp, CEO, himself has said, to help target terrorists with drone strikes. He openly admits that the product has probably been used to kill people before. And then there's Foundry, which doesn't kill people. That is for, basically, companies that are trying to streamline their manufacturing and services along those lines.

So there is a large addressable market for this. In fact, Palantir was involved in a lawsuit against the DoD basically saying, look, you guys need to give us a better look in services like ours, a better look as far as contracts go. They won their lawsuit. Now they have an even greater addressable market with the federal government. So this is basically going to be governments, whether it's the federal government, state government, or local, government for police, law enforcement, military, black ops services, talking about things like the CIA.

And then they specifically say, they're only going to work with Western democracies. They point out in their-- as one, that they're not going to work with China. And they make a big point about that. And that's obviously to shore up their relationship with the US government. But a very, very interesting company, and a lot of people somewhat frightened by it.