Palantir CEO Sells $254 Million in Shares But I'm Looking to Buy
Shares of the software company are under pressure but I'm looking out for my price to add.
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Palantir Technologies PLTR is catching a beating.
Well, I guess it wasn't too hard to see this one coming. The AI infrastructure providers in beat-down mode. Well, Advanced Micro Devices AMD is. We haven't even heard from Nvidia NVDA yet, but so are they. The big AI spenders are all getting slapped around. The Mag 7? More like the Stumbling 7. Microsoft MSFT, the aforementioned Nvidia, Meta Platforms META, Amazon AMZN, Apple AAPL, Tesla TSLA and even Alphabet GOOGL are fish in a barrel today for traders and algorithms looking to create some cash, hopefully still at a profit.
Apple and Amazon will both get a chance to change the narrative this evening. Until then, we're on our own. Even our beloved Palantir, perhaps the most focused big data centered AI platform providing software firm of them all, is in triage today. Should we, the loyal shareholders and followers of the mighty Palantir, be surprised? Co-founder and chairman Peter Thiel took some profits in late September and early October, when it was trading lower than this. Thiel "dumped" about $1 billion worth of stock. Those were planned Rule 10b5-1 sales and I guess, as a founder, he certainly was entitled to cash in a bit on what he created.
Then I Saw This
CEO and also a co-founder of the firm, Alex Karp, according to an SEC filing, also recently sold $254 million worth of Palantir stock. These were also sold using a Rule 10b5-1 plan, adding to a series of sales that Karp has been making over weeks. Should we worry? Thiel still personally held more than 34 million common shares after selling more than 11 million shares when he executed on his plan, so his interest is still clearly aligned with that of the firm's.
Karp appears to be disposing of shares acquired through the exercise of positions in derivative products (options) with much lower strike prices, while maintaining a stable long equity position. So, I am not all that worried about him losing interest. I just see them doing what they should, what I would do in their shoes to protect their own interests after what has been a spectacular run for this stock.
You're Not Wrong...
...if you choose to take some profits as well, given how much appreciation we have seen in these shares. Don't forget, Palantir reports next Tuesday, Election Day. PLTR will trade wildly until then.
Readers will see that PLTR has now tried to break out of the Andrews pitchfork model that I had shown to you about a month ago twice and failed. The stock has now formed a double-top pattern, which is a pattern of reversal, with a $40 downside pivot. Should this pivot point crack, I could see PLTR trading as low as $32, which is still above the 200-day SMA and should keep professional investors on board.
Traders might bail at the 50-day line and try to re-enter at the 200. I definitely start adding as we get close to that 50-day SMA and will continue to add down to the 200-day SMA. Volatility? I'm surprised it had not come for us sooner. Fear? Fear is but for the wicked. I shall add, not sell, but I will wait for my price.
Palantir reports on Tuesday, Nvidia earnings are due on November 20, after the election and after the FOMC boondoggle. That could be an upside catalyst should too much negativity get priced in.
At the time of publication, TheStreet Pro Portfolio was long AMD, NVDA, MSFT, AMZN and PLTR equity; and short TSLA equity.
