**Un-OFFICIAL** Trading and Investing Thread: Part XIII -- Robber Baron Edition

[Heaney]

This is a very interesting take......

I don't really like SPACS, but will dip my baby toe in this Tuesday for IPOF

IPOF crew

[Carbonfibre]

By this^ sequence, the inevitable horrendous earnings report from palantir should send it to the moon.

Don't forget we 2021 now.

When everyone and their dog is posting.

PLTR to the moon.

Rockets everywhere.

on wsb/twitter/you name it

thats when MM destroys all those bag holders.

playing earnings is always shiit.



here is DD someone wrote

Palantir Business Overview

In one sentence, Palantir creates operating systems that integrates vast amounts of data from an organization’s various data silos and allows users to build applications that drive better decision making
If that's confusing, no worries. The way I like to think of Palantir's software is that if Batman purchased the software from a company today for his supercomputer which aggregates data from thousands of sources and allows him to make intelligent decisions, that software would be from Palantir
The company has three main software platforms: Gotham, Foundry, and Apollo
Gotham (government side)
Gotham is Palantir’s software offering primarily for defense and intelligence sectors, AKA governments
Gotham is an end-to-end operating system that collects data from hundreds to millions of different sources and combines them onto one platform so users can manage operations
Gotham is quickly becoming the de facto data solution across many US federal agencies and rumor has it that it was the software that helped track down Osama Bin Laden in 2011
Foundry (commercial side)
Next up is Foundry, a platform that is geared towards the 6,000 businesses around the world with over $500 million in revenue
Similar to Gotham, Foundry transforms the ways organizations operate by creating a central operating system for their data
For example, one of Palantir’s customers is Skywise, an aviation platform that has become the central operating system for the airline industry
Apollo (underlying infrastructure)
Apollo is the last piece of the Palantir puzzle, and you can think of it as the underlying infrastructure that Gotham and Foundry lie upon
Apollo is a relatively new platform that Palantir introduced in order to more efficiently update the software that runs Gotham and Foundry, increasing the number of upgrades Palantir can manage across installations from an average of 20,000 per week in Q2 2019 to more than 41,000 per week in Q2 2020
The company has estimated its total addressable market as $119 billion, of which $63 billion is for the government side while $56 billion is for commercial side

The Palantir Business Model

Known as Forward Deployed Engineers or FDEs, Palantir leverages their technical talent as support and sales as well and they are often sent to the front lines of the battlefield for Gotham or company for Foundry
I believe that this in particular is what helped Palantir create a competitive moat in the government sector
While the FDEs are a differentiator, Palantir has also started to build out a more traditional salesforce in order to better target customers and explain the company’s value proposition but this salesforce currently only accounts for 3% of the company’s total headcount
Using both FDEs and a traditional salesforce, Palantir’s business model employs a 3 step process: acquire, expand, and scale
Acquire
In the acquire step, Palantir provides a potential customer with a short-term pilot program at Palantir’s expense and therefore operate at a loss
Expand
In the expand phase, Palantir seeks to understand the customer’s key challenges and ensure that its software delivers results
Scale
The scale phase is where Palantir thrives. At this point, the customer is essentially using Palantir’s software for its operations and Palantir can also upsell to the customer by continually offering new services with minimal extra cost
To give you a sense of the numbers for each phase, In 2019, Palantir generated a total of $742.6 million in revenue, of which $0.6 million came from customers in the Acquire phase, $176.3 million from the Expand phase, and $565.7 million from the Scale phase

The Bull Case

Section 2377
In 2016, Palantir sued the US Army in what’s known as Decision 2377
To go into the history a little bit, in 1994, the Federal Streamlining Acquisition Act (FASA) was passed, which required that the federal government consider and acquire readily available, proven commercial services like Palantir’s rather than custom-developed solutions built by the government which has a reputation for spending inefficiently
This rule was largely ignored until Palantir sued and won in court, and this was extremely important because it allowed Palantir to compete and win deals across all federal agencies, which greatly helps the company realize its total addressable market. Since then, Palantir's revenue from the US Army and US government has skyrocketed
Sticky, Best-in-Class Product
Simply put, there is nothing that offers what Palantir is offering. Its technology is way beyond most of its competitors in terms of offering a premium operating system
Palantir’s Gotham and Foundry often take more than a year to get fully up and running and the more it’s used, the more data in the system and the more time that has been spent by customers training employees on how to use the system
Palantir’s platforms becomes incredibly expensive to switch out of not just in terms of money but also time, with customers saying replacing the system could take anywhere from 6 to 18 months
To further prove this point, Palantir’s top 20 customers have been with the company for an average of 7 years and as of October 2020, 93% of revenue was generated by existing customers
In addition to this, in the latest quarterly earnings, Palantir was selected out of 999 bids by the US Army for a 2-year $91 million contract to build AI and machine learning capabilities
Positive Secular Trends and Growing, Achievable TAM
I think everyone at this point realizes that companies are going digital transformations and Palantir has spent $1.5 billion in the past 11 years creating innovative software that becomes increasingly powerful each day
The company is at the right place at the right time with a total addressable market expected to grow into the few hundreds of billions of dollars in the next 5 years
And with just about $1 billion dollars in revenue over the past 12 months, Palantir has less than 1% market share and has plenty of room for growth
But perhaps most importantly, Palantir is creating a much more efficient business model with an improving tech product that will help the company achieve its TAM
In the latest earnings call, management said that it plans to triple its salesforce headcount due to its recent success
And among other improvements, the Apollo platform has helped the company greatly reduce the costs and time required to get a customer up and running
Being able to better target customers and onboard them quickly while providing a best-in-class and sticky data platform points to a bright future for Palantir

The Bear Case

Double-Edged Business Model
While Palantir’s differentiated services and business model is one of the company’s key strengths, there are also several downsides as well
First, due to the custom-built solutions Palantir offers, the company undergoes a costly and complicated minimum 6 month sales cycle that can often amount to nothing
Second, even if a customer jumps on board, contracts are cancelable with a typical notice of 3-6 months
Third, the deep history it has with customers results in a very top-heavy concentration
As of the third quarter of 2020, the top 20 customers represented 61% of the company’s revenue, which notably is down from 73% from the year prior
Lastly, the deal-by-deal nature of Palantir’s business model means that the sources of revenue are lumpy and hard to predict, which can be a cause of concern for investors
Biden Administration and Negative Headline Risk
First, Peter Thiel was an outspoken supporter of Trump, who increased defense spending 5% a year while Obama decreased spending 3% a year.
While I don’t think this will be a long-term issue, a Biden presidency does represent a potential decrease in defense budgets which could hinder Palantir’s growth with Gotham
However, it is important to note that management during its latest earnings call did address this issue, stating that it has worked with many administrations across the world and doesn’t foresee this to be a problem
Second, Palantir has been targeted by the media several times for giving the government too much power and the political and social environment in which the tide seems to be turning against tech could present Palantir with headaches in the future
This risk is also further exacerbated by the fact that Palantir is 49.9999% owned by its co-founders, who are outspoken and strongly opinionated. Clear corporate governance risk.
Tough Competition in Commercial Space
In my opinion the largest obstacle Palantir faces is its ability to execute in the commercial space
Palantir offers an expensive, premium, custom-built end-to-end solution for clients, which is great for the government but not exactly what most businesses are looking for
Instead, most large scale businesses have already invested heavily into their own systems and want to buy best-in-class piecemeal solutions from different tech companies
Several notable businesses left Palantir from 2019 to 2020, including JP Morgan, Coca Cola, and American Express, and this decreased the customer count from 133 to 125
However, one important thing to note is that in the latest earnings call, Palantir’s management openly addressed this issue and the company has already started to provide solutions that are modular, which means customers can take the individual solutions they want rather than adopting the entire Foundry system
This also allows the company to offer different price points which may allow Palantir to be more competitive in the market
Recent news of bringing on BP and *** as clients could also be a sign that its Foundry business may be ready for mass adoption
Lock-up Expiration
Because this is a short-term risk, I’m adding this as a bonus bearish reason
Palantir went public through a direct listing on September 30, 2020, during which up to 20% of shares were available to trade (edit, thx for pointing this out!) for employees and stakeholders, (NOT all available shares outstanding)
This remaining 80% (roughly 30-40% of shares outstanding) is available to trade starting February 18th when the lockup expires and this could lead to a flooding of shares being sold and at the very least, volatility caused by the uncertainty

[Carbonfibre]

last part



Financials and Valuation

Starting off with the income statement, the important things to note is that from 2018 to 2019, the company has grown revenue by about 25% while maintaining roughly the same amount in operating expenses, which speaks to the improved operational efficiency of the company
The company has guided to $1.07 billion for the full year of 2020, which represents a 44% year over year increase and for a company with 1 billion in revenue, increasing revenue growth is a great sign
Comparing Q3 2020 to Q3 2019, the company was able to increase average revenue per customer by 38% and grew commercial revenue by 35% and government revenue by 68%
With all this said, one piece of concern in Palantir’s income statement is its net losses. The company has not been able to turn a profit in its entire history, but it did report positive adjusted operating income in its latest quarter when adjusted for stock based compensation
Moving onto its latest cash flow statement, what you mainly need to know is that the company has recently had a huge stock based compensation expense this past year due to the direct listing, so if you were to add that back, the company is essentially near break-even
However, the company’s free cash flow (operating cash flow minus your capital expenditures) is negative, so the company still is clearly losing money although much less than even a year prior
Lastly, Palantir has a great balance sheet
With $1.8 billion in cash and only $200mm in debt, the company is in a great position to fuel its future growth
Regarding the company’s valuation, while the company is growing nicely at 44% from 2019-2020, and is expected to grow 31% from 2020-2021 based on street estimates, it currently trades around a 45x NTM sales multiple depending on the day, which makes it one of the most expensive companies on the market
The key question here is do you want to pay an extremely high premium for a company that does have a best-in-class software or wait for a better entry point?

[MediocreGains]

Think PLTR will be fine as long as the earnings are decent. It’s been bleeding lately. I doubt that it’ll drop back down below 30 unless it really disappointments expectations.

[Carbonfibre]

Think PLTR will be fine as long as the earnings are decent. It’s been bleeding lately.

Long term for sure.

But earnings is where options holders get crushed.

At moment implied move is +/- 15 percent move.

It $32 after hours.

[Arem24]

You going to find out what IV means.


Good luck on your bag holding skills.


Apple had the best earnings ever and got crushed.


This is not wsb.

Hmm, well I’ve been holding PLTR since it was $9.xx

And it won’t be their earnings that matter, are you 12?

It will be their guidance and any news released during Q&A. There will of course be a focus on the margins as well.

Two words: Accelerating Growth

How about you bag deez nuts?

[MediocreGains]

Long term for sure.

But earnings is where options holders get crushed.

At moment implied move is +/- 15 percent move.

It $32 after hours.

Yeah, I sold 26p weeklies on it. It’s free money in my opinion unless they seriously chit the bed.

[Carbonfibre]

Hmm, well I’ve been holding PLTR since it was $9.xx

And it won’t be their earnings that matter, are you 12?

It will be their guidance and any news released during Q&A. There will of course be a focus on the margins as well.

Two words: Accelerating Growth

How about you bag deez nuts?

[Carbonfibre]

Yeah, I sold 26p weeklies on it. It’s free money in my opinion unless they seriously chit the bed.

Doubt it. Won't go below $30.

The lockup expiring should be interesting.

Think SNOW retracted hard when lockup period expired.

But retraced all the steps back to $300

[Harry362]

IPOF crew

What if Ipof is another Clover Health?

[mikusk]

I am playing pltr ERs aswell, plan is gtfo asap in premarket or on open, definitely not holding through lockup exp

[CTSV648HP]

PLTR is a long term buy and hold. 5 years from now you’ll be ecstatic. 2 months from now you may be angry. I’m looking to get at least 2k shares to hold long term.

[MediocreGains]

What if Ipof is another Clover Health?

Started buying CLOV at 12. Hoping for a reversal soon.

[Venom08]

This is the most important chart to ever be posted in these trading chats, IMO. It’s all pointing to massive upside potential in the market with the djia hitting 65,000. Contrary to what most think, the market is far from overbought, long term. The 2009 low was simply the best buying opportunity since the Great Depression.
https://imgur.com/a/gezE75W

Now, I am not negating a blast off to 40,000 any time soon, as I do highly believe we are due for a serious pull back. But nothing too wild so just btd.

[Heaney]

What if Ipof is another Clover Health?

Then I will no longer have 225K in my acct hahaha. In reality Chamath has been incredible outside of Clover. OPEN, SPCE and SoFi are all amazing targets. I think he's definitely a self promoter and I'm personally not a huge fan of his but his success in SPACs can't really be minimized IMO.

[meep316]

XMET Brahs, this is the next step towards merger. Look for a big day on Tuesday.



https://www.newsbreak.com/news/21631...spac-rm-player

[SillieBazzillie]

XMET Brahs, this is the next step towards merger. Look for a big day on Tuesday.



https://www.newsbreak.com/news/21631...spac-rm-player

Was just going to post this. Once that gets approved, the purchaser of the shell will be free to announce the reverse merger company and the stock should moon.



Also check out DPLS. They received approved ITAR registration.

https://certifications.thomasnet.com.../#:~:text=ITAR Registered ITAR stands for The International Traffic,or from specific countries%2C exceptions among many others.

This is huge considering the rumors of government contracts.

[Elias373]

This is the most important chart to ever be posted in these trading chats, IMO. It’s all pointing to massive upside potential in the market with the djia hitting 65,000. Contrary to what most think, the market is far from overbought, long term. The 2009 low was simply the best buying opportunity since the Great Depression.
https://imgur.com/a/gezE75W

Now, I am not negating a blast off to 40,000 any time soon, as I do highly believe we are due for a serious pull back. But nothing too wild so just btd.

my dick can only get so hard

[mikusk]

Was just going to post this. Once that gets approved, the purchaser of the shell will be free to announce the reverse merger company and the stock should moon.



Also check out DPLS. They received approved ITAR registration.

https://certifications.thomasnet.com.../#:~:text=ITAR Registered ITAR stands for The International Traffic,or from specific countries%2C exceptions among many others.

This is huge considering the rumors of government contracts.

do we know about any other shells besides this one and AWGI ? My retard broker did not let me buy XMET fukkin pissed

@meep316

[Bingo559]

Is Fundrise legit?

I've watched a couple YT vids, so it's definitely real. Whether or not they shut down and runoff with everyone's $ in the next 5 years is to be seen. You do need to be able to have the money invested for about 5 years. They don't want liquidity to dry up with people making withdrawals frequently and have projects not being funded.

[Harry362]

Then I will no longer have 225K in my acct hahaha. In reality Chamath has been incredible outside of Clover. OPEN, SPCE and SoFi are all amazing targets. I think he's definitely a self promoter and I'm personally not a huge fan of his but his success in SPACs can't really be minimized IMO.

Hmm the 3/19 Ipof 15p are close to $200 each....

I might sell 25 of those on Tuesday. Good way to either enter at 13 or get some fat premiums




Anyone long BB here? Looking at selling puts on them as well.

[chalup]

I've watched a couple YT vids, so it's definitely real. Whether or not they shut down and runoff with everyone's $ in the next 5 years is to be seen. You do need to be able to have the money invested for about 5 years. They don't want liquidity to dry up with people making withdrawals frequently and have projects not being funded.

Investors pay a 0.15% annual investment advisory fee, which may be waived under certain circumstances. This means that over a 12-month period, you will pay a $1.50 advisory fee for every $1,000 you've invested with us. Separately, the funds in our standard portfolios pay a 0.85% annual asset management fee. That's $8.50/year for every $1,000 invested.

fees seem insanely low. also how do they liquidate and turn the investment into dollars for people? Inderdasting. Might add it to my portfolio like my acorns account.

edit: Ah the 1k down seems a bit shady. Any miscers signed up for this?

[Heaney]

Hmm the 3/19 Ipof 15p are close to $200 each....

I might sell 25 of those on Tuesday. Good way to either enter at 13 or get some fat premiums




Anyone long BB here? Looking at selling puts on them as well.

I'll admit that having so many warrants is fukin wild in terms of price movement lol, every $0.10 the warrants move my account moves $4700. Probably best if I just don't watch this one until they announce.

[Harry362]

I'll admit that having so many warrants is fukin wild in terms of price movement lol, every $0.10 the warrants move my account moves $4700. Probably best if I just don't watch this one until they announce.

Why ipof over iPod

[Heaney]

Why ipof over iPod

No real reasoning outside of expecting a better target since its his largest spac to date.

[extendlol]

If not mentioned already.. COMS has a big chance to shoot up in coming weeks.

Current price: ~5.30
PT: 7-10+

DD:

They have some serious leadership, along with insider buying.

News in past weeks:
https://www.marketwatch.com/press-re...ion-2021-02-02

26mil closing.
https://finance.yahoo.com/news/comso...190000084.html


Need i also mention they're in 5g and drone technology? Drones have a good chance to be be the next EV.

[Maestro]

Opinions on buying Calls on walmart before their ER thursday? Between the time of their last ER and this upcoming report, a stimulus check was distributed and there was the superbowl. I don't see how they fail to meet their margins.

[jimberee]

Opinions on buying Calls on walmart before their ER thursday? Between the time of their last ER and this upcoming report, a stimulus check was distributed and there was the superbowl. I don't see how they fail to meet their margins.

neither can anyone else that's why it's at its current value

[camaleom]

with most places opening again I think walmart is not going to post "amazing" results.

COMS looks interesting - thx bro!

[Heaney]

Opinions on buying Calls on walmart before their ER thursday? Between the time of their last ER and this upcoming report, a stimulus check was distributed and there was the superbowl. I don't see how they fail to meet their margins.

Companies who have beaten really aren't seeing much in the way of upward movement recently.