For those who are following us, I have something for you. Yes, we are going to talk about PLTR (Palantir). I liked them. I invested in them. I lost money. I did my tax harvesting late last year and it’s continuing to go down.
I must say. A company with this much talent and future…for their stock to perform this poorly…I am disappointed. And I think I finally know why PLTR stock has been talking so much.
Alex Karp is not a good leader. Yes, I said it. And here is a reason why. He keeps doing interviews where he said he is focus on long-term strategy rather than short-term. There are old videos of him saying this and new videos as well. I understand the logic of this but as a publicly traded company, the board has to do what’s right for the shareholder interest. Some might argue that the long term strategy is more important than short term. I agree but I believe it’s not that you choose one or the other but if you are good leader, you need to do both.
Let me summarize here.
Current flaw with Alex Karp and the board
- Focus solely on long term strategy rather than delivering both short AND long term strategy
- Keep telling the media that they are not interested in meeting short term expectations
- Excessive stock-based compensation that has been diluting shares
| Quarter | Share Count | Quarter-Over-Quarter Growth |
|---|---|---|
| Q3 2021 | 1.964 billion | 3.7% |
| Q2 2021 | 1.895 billion | 4% |
| Q1 2021 | 1.821 billion | 3.3% |
Why does this matter?
- Good leaders deliver both long AND short term results like Salesforce or Microsoft and the street rewards them with a higher stock price
- With higher stock price, you can make more acquisitions to further differentiate in the market place rather than solely relying on organic development of product and solutions
- Palantir can get better talent as the prospect of getting RSU’s or stock options that will appreciate will motivate job seekers to consider Palantir even more
So when investors and the Wall St sees now Alex is behaving, they are downgrading their stocks, shorting it or liquidating their holdings for a loss because they don’t think they have what it takes to deliver and maximize shareholder value.
Yup. The conclusion: I should have sold it long time ago and minimize my loss. Wait 1-2 more years until it falls below $5, board members (or even an activist boot Alex), and then get back in.
Share your thoughts if you disagree. Also, do your own DD before making any investment decisions.