Alexander Karp, CEO of Palantir Technologies Inc.
While some companies like Tesla are diversifying into Bitcoin, data analytics software company Palantir is betting on gold. Palantir bought $ 50 million gold bars in August, the company announced in its latest income statement.
The move reflects a growing company that is holding cash in an unconventional asset in response to the economic uncertainty caused by and the government’s response to the coronavirus pandemic.
The price of an ounce of gold broke the $ 2,000 mark for the first time last year as the pandemic worsened and US government stimulus measures continued. This year, investors have voiced their inflation concerns louder, and gold is sometimes viewed as an inflation hedge, even though prices are down 7% over the year. Some investors have thought that cryptocurrencies could play that role too.
“In August 2021, the company bought $ 50.7 million in 100-ounce gold bars,” said Palantir in its August 12 earnings announcement for the second fiscal quarter. “This purchase will initially be held in a third-party secure facility in the northeastern United States and the Company will be able to take possession of the bullion stored at the facility at any reasonable time.”
Palantir did not respond to a request for comment on the investment.
After closing a direct listing and debuting on the New York Stock Exchange in September, Palantir is now debt-free, the company’s chief financial officer Dave Glazer told analysts on a conference call last week. Revenue has accelerated for two consecutive quarters, with 20 new customers added in the second quarter of the fiscal year.
Investing in growth, Palantir has hired more than 100 sales people in the past two quarters and plans to resume the hiring quickly, Glazer said.
The company remains unprofitable as it was a privately owned company. Meanwhile, its cash supply has increased, thanks in part to the issuance of shares and the proceeds from the exercise of stock options.
This has given Palantir an opportunity to invest in its own customers, including early stage companies that are very different from existing government customers like the U.S. Department of Health. According to the income statement, investments include companies that have gone public through mergers with special-purpose acquisition companies such as AdTheorent, Fast Radius, FinAccel and Tritium.
It is possible that Palantir could expand into cryptocurrencies after investing in gold. In May, after Glazer was asked in an analyst call whether the company could have Bitcoin or other cryptocurrencies on its balance sheet, he said, “The short answer is, yes, we think about it and even discussed it internally.”
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