Palantir Buys $51 Million of Gold to Hedge Against ‘Black Swan Event’

Palantir had previously said it would accept Bitcoin as a form of payment before adding precious metals more recently. At the time of Palantir’s investment in gold, the market was in a much different spot. Stocks were months away from peaking, crypto was flying high and interest rates were near zero.

Although black swan events seem to come with a negative connotation, the concept does not only apply to negative events. The company on August 12 reported second-quarter earnings that beat analyst estimates, closing 62 deals worth $1 million or more in the quarter. In its June quarter financial filing with the Securities and Exchange Commission, Palantir disclosed $250 million in commitments to a group of 10 companies through June 30.

«You have to be prepared for a future with more black swan events,» Sankar added. “You have to be prepared for a future with more black swan events,” he said, referring to major unexpected events that can have negative consequences. The gold purchase was buried in a securities filing last week for its quarterly financial results and reported earlier this week by Barron’s. The acceptance of gold as a form of payment hasn’t been previously reported. The company spent US$50.7 million this month on gold, part of an unusual investment strategy that also includes startups, blank-check companies and possibly Bitcoin.

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«Cash equivalents primarily consist of money market funds and U.S. treasury securities with original maturities of three months or less, which are invested primarily with U.S. financial institutions,» the firm’s filing said. Investing in gold is seen as a way to hedge against negative events in the future as well as inflation, as proponents see gold retaining its inherent value throughout any economic downturn. Palantir, co-founded by the technology billionaire Peter Thiel and Chief Executive Officer Alex Karp, makes software used by governments and businesses.

Palantir Technologies announced a 13 percent increase in Q revenue to $533 million and also reported its third consecutive quarter of GAAP profitability. Download our application to follow the precious metals market news, anywhere and anytime. Palantir, cofounded by the billionaire Peter Thiel, has built its reputation as a secret purveyor of government spy technologies by supplying tools to law enforcement and military clients around the globe, Insider previously reported in August 2020. Both asset classes have been touted as hedges against inflation, though bitcoin’s effectiveness has been in question as of late.

Gold settled at $1,785 an ounce on Tuesday

Palantir Technologies Inc. has purchased nearly $51 million in physical gold so far in August and may accept payment in gold in the future, according to a filing from the software company’s second quarter financial results. The Colorado-based company purchased $50.7 million worth of 100-ounce gold bars sometime in August, Palantir said in a short note buried in its 93-page second-quarter earnings report last week. Palantir’s 100-ounce gold bars will be kept in a secure location in the northeastern U.S., according to the filing. “The company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice,” Palantir wrote. Palantir Technologies Inc purchased $50.7 million worth of 100-ounce gold bars in August, according to the company’s latest earnings statement. While some companies such as Tesla are diversifying into bitcoin, data analytics software company Palantir is betting on gold.

• Palantir also disclosed that it has completed equity investments of $25 million in an “electric vehicle company,” $3 million in an “autonomous aerial vehicle company,” and $5 million in Astrocast, which operates a network of nanosatellites.
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• Palantir bought $50 million in gold bars in August, the company disclosed in its latest earnings statement.
• Among the investments are companies that have gone public through mergers with special-purpose acquisition companies, such as AdTheorent, Fast Radius, FinAccel and Tritium, according to the earnings statement.
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During the purchase time, the macro environment was very different for gold. The Federal Reserve didn’t begin its aggressive tightening cycle yet, stock performance was about to peak, and Bitcoin didn’t crash yet, trading around its record high of $69,000. It’s possible that following the gold investment, Palantir could expand into cryptocurrencies. In May, after Glazer was asked on an analyst call if the company could have bitcoin or other cryptocurrencies on its balance sheet, he said, «The short answer is, yes, we’re thinking about it, and we’ve even discussed internally.» Bloomberg also reported that Palantir will accept payment from its customers in gold.

Palantir Technologies Option Volume And Open Interest Over Last 30 Days

But gold as an alternative to cash loses its appeal for many investors in an environment of rising interest rates, because there’s suddenly money to be made in government bonds and high-yield savings products. Meanwhile, its supply of cash has been increasing, in part thanks to stock issuance and proceeds from the exercise of stock options. The move reflects a growing company stashing cash in an unconventional asset in response to economic uncertainty spurred by the coronavirus pandemic and governments’ response to it. The purchase of gold bricks is just one of Palantir’s unusual investment strategies. The price of an ounce of gold shot past $2,000 for the first time ever last year as concerns over the COVID-19 pandemic spiked.

• Palantir Technologies Inc. said it’s preparing for another “black swan event” by stockpiling gold bars and inviting customers to pay for its data analysis software in gold.
• The company on August 12 reported second-quarter earnings that beat analyst estimates, closing 62 deals worth $1 million or more in the quarter.
• In a report released today, Brent Thill from Jefferies maintained a Hold rating on Palantir Technologies (PLTR – Research Report), with a price target of $17.00.
• The filing shows that the transactions took place between March 30 and June 22.
• Palantir, which made its public market debut in September 2020, reported higher-than-expected revenue for the second quarter of 2021 after closing more than 62 deals, each worth $1 million or more.

“Such purchase will initially be kept in a secure third-party facility located in the northeastern United States and the Company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice,” it added. Palantir Technologies Inc. said it’s preparing for another “black swan event” by stockpiling gold bars and inviting customers to pay for its data analysis software in gold. The move into the precious metal was prompted by worries of another black swan event at a time when the company’s cash pile is growing from its stock sales. «You have to be prepared for a future with more black swan events,» Palantir COO Shyam Sankar told Bloomberg. The gold purchase was made in the form of 100-ounce gold bars, which “will initially be kept in a secure third-party facility located in the northeastern United States,” according to the filing.

Below, we can observe the evolution of the volume and open interest of calls and puts, respectively, for all of Palantir Technologies’s whale trades within a strike price range from $12.0 to $20.0 in the last 30 days. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions imputed value meaning of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. In a report released today, Brent Thill from Jefferies maintained a Hold rating on Palantir Technologies (PLTR – Research Report), with a price target of $17.00.

Revenue has accelerated for two consecutive quarters, with 20 new customers joining in the fiscal second quarter. In May, the company’s finance chief Dave Glazer said that Palantir was also looking into having bitcoin or other cryptos on its balance sheet. Palantir Gotham, one of the company’s artificial intelligence platforms, is used by counter-terrorism analysts at offices in the United States Intelligence Community (USIC) and United States Department of Defense, according to Palantir.

Jefferies Reaffirms Their Hold Rating on Palantir Technologies (PLTR)

So far, no one has paid with gold or bitcoin, Sankar said, adding that accepting non-fiat types of payments «reflects more of a worldview.» Palantir’s newly purchased gold will be stored at a secure third-party facility, according to the company. Now, the precious metal is trying to find its foothold around the $1,800 an ounce level, which is currently a strong resistance point.

Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Palantir Technologies has an analyst consensus of Hold, with a price target consensus of $13.32. As Palantir COO Shyam Sankar explained to Bloomberg, the investment is a hedge against economic crisis. Palantir, cofounded by the billionaire Peter Thiel, has built its reputation as a secret purveyor of government spy technologies by supplying tools to law enforcement and military clients around the globe.

Gotham compiles and analyzes large amounts of information using AI algorithms to help organizations, including the US military, make data-driven decisions. A spokeswoman for Palantir confirmed with Bloomberg that no one has paid in bitcoin nor gold just yet. Palantir also revealed that at the end of Q1, it held $1.62 billion in U.S.

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Getting back to Palantir, the company’s second-quarter earnings beat analyst estimates. In the period considered, Palantir closed 62 deals worth $1 million or more. Of those, 21 were worth more than $10 million and 30 were more than $5 million. The company has around $2.3 billion in cash and is exploring creative uses for that money. Dave Glazer, the company’s finance chief, stated at that time that there were numerous internal discussions on that matter. Besides, it is taking stakes in startups that are customers of Palantir software.

«The company is able to take physical possession of the gold bars stored at the facility at any time with reasonable notice,» the filing said. After reporting the gold purchase in August 2021, Palantir said the move into the precious metal was prompted by worries of another black swan event when the company’s cash pile was up from its stock sales. That has given Palantir an opportunity to invest in its own customers, including early stage companies, which are very different from existing government customers such as the U.S. Among the investments are companies that have gone public through mergers with special-purpose acquisition companies, such as AdTheorent, Fast Radius, FinAccel and Tritium, according to the earnings statement. (Bloomberg) — Palantir Technologies Inc. said it’s preparing for another “black swan event” by stockpiling gold bars. Black swan events are characterized by their extreme rarity, severe impact, and widespread insistence they were obvious in hindsight.

Palantir relocated to Denver last year and mocked its peers in Silicon Valley on the way out. In the interview, Shyam compared Palantir’s culture with an “artist colony,” rather than a tech company churning out software on an assembly line. Governments have strongly embraced Palantir software to help them make sense of the coronavirus pandemic, the current so-called black swan, a random and unpredictable event. In the interview, Sankar compared Palantir’s culture with an “artist colony,” rather than a tech company churning out software on an assembly line.

Market analysts praised Palantir for their efforts in building an unprecedented AI fortress with the CEO calling for increased collaboration between the tech sector and the government. Palantir also disclosed that it has completed equity investments of $25 million in an “electric https://1investing.in/ vehicle company,” $3 million in an “autonomous aerial vehicle company,” and $5 million in Astrocast, which operates a network of nanosatellites. Palantir, co-founded by CEO Alec Karp and technology mogul Peter Thiel, creates softwares used by the government and corporations.