- Palantir Technologies granted its CEO more than $1 billion in compensation for 2020.
- PLTR shares have lost much of their vigour since rising 350% off the IPO.
- The big data leader has received a number of downgrades in recent months
- PLTR Price Prediction: Palantir Technologies Inc bulls need to surpass these two technical hurdles
Update May 3: Palantir Technologies Inc (NYSE: PLTR) remains under immense pressure – falling for the fifth consecutive day and kicking off the new month with a downfall. The adage "Sell in May and go away" rings true for the company run by Alex Karp, who is somewhat personally responsible for the recent downfall. Karp's share sale has been seen as a classic case of insider dumping of equity, which does not bode well for the firm. Critical support awaits at $21.78.
At least someone is making money.
Reuters broke the news this morning that Palantir CEO Alex Karp took home $1.1 billion in compensation in 2020 for taking his company public last year. The company he co-founded has never turned a profit in 18 years of existence.
The $797.9 million in options and $296.4 million in stock awards are at least partly due to PLTR’s meteoric rise. After a direct listing circa $10 a share last fall, the big data outfit exploded on investor euphoria up to $45 in January before gradually dropping down to what appears to be a wide support zone between $21 and $27.50.
Shares of Palantir closed down 2% Thursday at $23.37.
PLTR was co-founded by legendary Silicon Valley investor Peter Thiel. The firm is a data mining and analytics technology company that aids companies and governments in integrating and analysing their various diverse data sets to help with decision-making.
Though retail investors and star stock pickers like Cathie Wood have continued to expect big things from the stock, company insiders like Karp having been on a share-selling spree since the post-IPO lockup period ended in February. Just last week, Karp offloaded another $42.1 million worth of shares.
It would appear this insider selling would need to end before shares gain a reprieve to move higher anytime soon.
One reason Karp’s gigantic compensation package may irk shareholders is that stock-based compensation is one of the primary obstacles to profitability. In the first half of 2020, the company lost close to $165 million. But without stock-based compensation, the company could have generated a slim net profit.
PLTR stock price: Descending triangle to be tested
Besides the weight of insider selling, however, downgrades by Credit Suisse, Morgan Stanley and Citigroup in recent months seemed to have dimmed the hopes of some early optimists.
A recent upgrade to buy by Goldman Sachs with a price target of $34 gave some renewed vigour, but the consensus estimate still has an average price target of $26.33, just 12.6% above the current price.
Of course, any stock that experiences a 47% jump in revenue in the previous fiscal year is likely to keep many investors interested.
Palantir shares have fluctuated within a descending triangle since late January. The lower support of the triangle sits at $21.20, and the current price is nearing the triangle’s pinnacle, a make or break level where traders will expect either a break above the downtrend resistance or a rejection that would keep the stock under the current bearish pattern.
On the daily chart, PLTR is straddled by the 20-day Simple Moving Average (SMA), which is sitting just below at $23.30, and the 50-day SMA at $24.07. This tight pairing places more emphasis on expectations that PLTR shares are set to make a move soon.
PLTR 1-day chart
If Palantir breaks above the descending triangle’s upper limit, the next resistance level is the April high of $27.50.
If the stock, however, falls below the triangle’s baseline, the next support to watch for is the $20.19 monthly low.
If shares decide not to make any serious move after the triangle closes its jaws, then the market will look ahead to Tuesday, May 11 for the company’s Q1 2021 earnings results. Palantir is forecasting full fiscal year 2021 revenue growth of 30%.
Previous updates
Update May 3: Palantir Technologies Inc (NYSE: PLTR) extended its fall on Friday, falling another 1.4% to $23.04. Shares of the Denver-based technology company suffered four consecutive days of falls, paring hard-fought gains recorded earlier in April. Is it "Sell in May and go away" for PLTR? Insider selling and the CEO's pay package could haunt the firm, while optimism about is prospects and improving public image could keep the equity bid.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD attracts some sellers to near 0.6300 ahead of Chinese PMI release
The AUD/USD pair weakens to near 0.6300, snapping the three-day winning streak during the early Asian session on Monday. China’s fresh stimulus measures to promote its development of index investment products fail to boost the China-proxy Australian Dollar.
USD/JPY remains depressed amid hawkish BoJ and risk-off mood
USD/JPY kicks off the new week on a weaker note, though it manages to hold above the monthly low retested last Friday. US President Donald Trump's decision to impose steep import duties on Colombia revives trade war fears and benefits the safe-haven JPY amid the BoJ's hawkish rate hike.
Gold loses ground to near $2,765 on renewed US Dollar demand
Gold price edges lower to around $2,765 during the early Asian session on Monday, pressured by the renewed US Dollar demand. However, the potential downside for the precious metal might be limited amid the cautious mood and uncertainty surrounding tariff measures by US President Donald Trump.
Week ahead: Fed, BoC and ECB meet amid Trump tariff threats
Three central bank decisions awaited as tariff reality sets in. Fed set to go on pause, ECB and BoC to likely cut again. But US GDP and PCE inflation could steal the limelight. Australian CPI and China PMIs also on tap.
ECB and US Fed not yet at finish line
Capital market participants are expecting a series of interest rate cuts this year in both the Eurozone and the US, with two interest rate cuts of 25 basis points each by the US Federal Reserve and four by the European Central Bank (ECB).
Trusted Broker Reviews for Smarter Trading
VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.