The intro (letter from the CEO) is interesting, distancing themselves from Silicon Valley:
"The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires.
Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.
From the start, we have repeatedly turned down opportunities to sell, collect, or mine data. Other technology companies, including some of the largest in the world, have built their entire businesses on doing just that.
Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace. For many consumer internet companies, our thoughts and inclinations, behaviors and browsing habits, are the product for sale. The slogans and marketing of many of the Valley’s largest technology firms attempt to obscure this simple fact."
Oh, how high-minded and ethical of them, to turn down "opportunities to .. collect or mine data" like the rest of Silicon Valley does. Give me a break.
It's one thing for consumer internet companies to show me an ad for mattresses because they know I searched for mattresses. It's wholly another to help government entities aggregate license plate data, run "predictive policing" programs, run the Pentagon's spy drone program, and help ICE track immigrants, as Palantir does. Frankly if given the choice I'll take the mattress ads.
I think the difference is that all those programs are run by the government using data the government owns. The LAPD is going to scan license plates and analyze the data whether Palantir helps them or not. Palantir does not by itself collect or mine data, which could be better or worse depending on how much you trust your government.
>The LAPD is going to scan license plates and analyze the data whether Palantir helps them or not
this isn't true actually. the police uses services like Palantir as a sort of get around because lots of data collection literally requires a warrant[1]
The US suffers from a schizophrenic legal situation where it has (for good reasons) barred its government from spying on its citizens, but has somehow outsourced it to private entities, the one level of indirection apparently makes that okay.
> the one level of indirection apparently makes that okay
This is a pattern I've seen from America in general, loopholes against the spirit of the law, healthcare through 3rd parties, it seems there is always somewhere to kick the buck down for liability purposes. There is always a quest to find a technicality for a way out of some rules, the spirit of the rules don't seem to matter much.
"Somebody will do something you deem immoral whether you participate or note" is not a strong argument for why you should actually participate.
It's clear that the authors of the US Constitution believed that it should be difficult for the government to perform certain enforcement actions. The last 200+ years of jurisprudence and legislation back this up. The police need a warrant in order to search a home. The prosecution needs a court order to compel testimony.
I don't have a problem with saying "the LAPD is going to enforce traffic laws whether or not Palantir assists them". But my response would be "yes, and we should think very carefully about how easy we make it for 'enforce traffic law' to look like 'mass surveillance'". Legislation and jurisprudence move a lot slower than we'd like and I think it's good that individuals and companies think about how they choose to participate in these systems and if they're over-enabling government enforcement and surveillance while we wait for politicians and judges to play catch-up.
not sure if that's what their saying. my interpretation is they're not going to sell that data or the result of their analysis for advertising purposes.
they'll collect or mine whatever they can get their hands, i'm certain of that. it's a data company.
No they won't, unless they are flat out lying. They can lie, but considering they have many customers all over the world, mostly big companies with big legal departments, it may not be the best for their business.
Palantir produces data analysis tools, this is basically Excel but for bigger data sets. Microsoft doesn't get what you put into your Excel sheets (not really sure now...) and neither does Palantir with their platform.
They probably have some sort of telemetry to monitor how their tools are used, to "improve user experience", like most large software vendors. But it is not related to the data being processed.
Palantir develops many of the tools which implies they’ve run them themselves also. For example, they have tools for scraping social media platforms to build profiles of people. You don’t build those tools without running them along the way. They just make their clients run them most of the time for liability reasons (it’s a lot harder to prosecute the CIA for spying)
They brag repeatedly about their “data collection” methods although of course details are hard to find. I’m not convinced they just make the tool and have no access to the data.
They’re a famously shadowy secretive spying company and nowhere do I see a terms of service that says they don’t collect data on me. They’ve previously discussed their tools for spying on Facebook and other “public” sites and it seems clear they must have run them at some point. They come in and modify their software to work especially for a customers needs.
Are you familiar with Project Maven? They gather drone data and have humans label it so they can plan drone strikes and other intelligence efforts.
Palantir builds tools for other government agencies to analyze their own data. Palantir the company doesn't see the data that Palantir the tool (Gotham or Foundry) is used to analyze.
Why do you still believe the bullshit corporate PR? Snowden, Manning, Assange... Crypto AG, Cambridge Analytica, etc. How many times does it need to happen for us to see it?
The only real solution I've found is to help build the fully agent-centric web, where there are no third parties - full P2P Protocol Cooperativism. [1] [2]
Because I worked at Palantir. Can you point to sources specifically claiming that Palantir itself, not the organizations using Palantir, are accessing people's data? Because if so, this is news both to me and to a lot of other former and current Palantir employees.
Palantir the company doesn't have access to the data. The government agencies have access to the data. Palantir licenses its software to these organizations. The company doesn't have special access to any sensitive data.
The point I'm making is that I don't agree on Palantir's approach and strategy. If you watch the Ava Duvernay's documentary '13th' you'll see that systemic oppression of black bodies never ended. The school-to-prison pipeline guarantees exploitation and incarceration of the US's dark history of slavery and genocide.
So instead of Palantir pushing for systemic change, I see their technology as regressive and focused on giving power to unjust causes.
If you want to read more about how algorithms recreate bias, there's quite a lot of material that has come out recently. Here is an important point from Algorithsm of Oppression:
※ Those who have the power to design systems--classification or technical [like library, museum, & information professionals]--hold the ability to prioritize hierarchical schemes that privilege certain types of information over others.[1]
There's also another book called Automating Inequality, among others.
There seems to me to be a strong neoliberal/libertarian population on Hacker News who believes, as Margaret Thatcher famously said, that 'there is no alternative'. They have completely soaked up Silicon Valley's Imperialist 'Manifest Destiny' mission.
They can't see their own privileged position and power. They attribute their own success to their personal efforts, instead of seeing how various social institutions (including knowledge and access to a rich scientific inheritance) built them up.
So when we pose them a question about Project Maven, they want to identify the one 'bad apple' [1] instead of facing the fact that systemically something is rotten, and that we might have to evolve the underlying architectures. [2]
I find their argument somewhat disingenuous, as they are paid for that mining directly by governments (they famously created the MVP with the express intent of selling it to the US), and therefore have never needed to consider advertising.
Unlike these Silicon Valley carpetbaggers that seek to profit off people´s data, we have declined repeated opportunities to sell, collect, or mine data, and just patriotically take copious amounts of blood money from military and security forces
This is virtue-signalling in its finest form. Palantir is a died in the wool Silicon Valley company but they don't want to burden themselves with the baggage that comes with that.
Yeah we work with ICE and the military, and sure we help police departments infringe your fourth amendment rights, but have you ever got an ad for zappos after searching for shoes?
This letter is clearly written with dumb, naive retail investors in mind. Anyone familiar with Palantir’s history knows that their first headquarters was a building they took over from Facebook. The two companies are intertwined in many, many ways.
That is honestly my take away from this letter. Who, knowing anything about Palantir, reads this and is willing to trust anything they provide or give them your money? I know that S1's tend to be aspirational and the most positive/flattering framing possible but...this is just flat out an alternate reality. Anyone willing to build this level of false narrative about the history of a company is not one I would trust to deliver a true narrative about earnings or financial status.
It’s not. They don’t have any data of their own. They offer a data integration platform and then a slate of apps on top of that platform for institutions to perform analysis on their own data. They do make a few plugins that mine social media and other “open” sources but have to do a funny ownership dance so it’s the institution that is breaching the TOS rather than them.
Oh well ok then, they don't do any data collection or mining, they just sell the tools to empower three-letter agencies to do it more effectively. Conscience is clear then!
Genuinely curious: at what point is it "okay" to create data analysis tools that might be used by 3-letter agencies?
I imagine that before Palantir came around, the analysts at these agencies did what most other analysts anywhere do and used Excel to create sophisticated pivot tables when working on {insert defense operation}.
Where does it stop being okay? To the extent that it even matters, Palantir appears to at least own up to the fact that they are used by governments.
Their early investors were the CIA. I know the point you’re trying to make but Palantir isn’t really in the gray when they have been basically a branch of the spy agencies since the beginning
Even per their S-1, their market sizing shows "Commercial" to be a substantial proportion of their aspirations:
> Commercial. Our estimate of the TAM in the commercial sector is $56 billion.
> Government. We estimate the TAM in the government sector, including government agencies in the United States, its allies, and in other countries abroad whose values align with liberal democracies, is $63 billion.
Well sure they point to a theoretical market that’s big but it isn’t where their revenue comes from now
> The company’s top three customers — which aren’t disclosed — together represented 28% of the company’s revenue for 2019. Its top twenty customers represented 67% of total revenues, with each one of those customers averaging $24.8 million in revenue.
They admit they count every single government sub-agency as a different customer (their example is NIH and the CDC would count separately despite the same parent organization) so the top 25 is basically just governments. There is incredible revenue concentration there.
Metropolis got deprecated (read renamed) Foundry because they kept screwing up their sales and decided a rebrand would be more effective on their commercial side.
Foundry started as our attempt to create scalable process and rigor around data integration. There's a longer story to tell here, but the short version is that we started out with off-the-shelf orchestration systems for running jobs on a schedule (think Jenkins and Rundeck — things that were more robust than cron). At some level, that worked, and we had to figure out how to scale it, leading to a combination of HDFS, Rundeck/Jenkins, a git repo, and a common language for mutating data.
Where in this filing does it say that their top 25 customers are governments? And where in this filing are the current revenue numbers classified as government vs non-government?
Also, it’s important to consider their TAM projections because 1) those are the only numbers we have in this S-1 that specifically delineates government vs non-government, and 2) their aspirational valuation is predicated on this TAM. It’s who they think they will grow up to become.
Well yeah I agree it’s aspirational but just because they want to do security work for Apple doesn’t mean their current customer base isn’t governments.
Their largest project is Palantir Gotham which is exclusively for government agencies (federal, state, ICE, and by Project Maven after the tech companies abandoned it due to ethics concerns!)
You’re talking primarily about Palantir Metropolis which is used by hedge funds. Not exactly some beneficial use of technology to counterweight working with ICE to separate children from their families.
They don’t list their top customers because they are top secret government agencies but if you look at their customers then it’s clear that the ones paying them the most are secretive government agencies and it’s been that way since day 1
> Their largest project is Palantir Gotham which is exclusively for government agencies (federal, state, ICE, and by Project Maven after the tech companies abandoned it due to ethics concerns!)
Did you even read their S-1? Palantir Gotham is NOT “exclusively for government agencies”. According to their own filing, it’s used by their Commercial team too. It even says so on their website.
> You’re talking primarily about Palantir Metropolis which is used by hedge funds. Not exactly some beneficial use of technology to counterweight working with ICE to separate children from their families.
If you’re going to attack them, do it honestly by accurately representing them. Palantir isn’t used just “used by hedge funds”, if you actually read their prospectus and their website, their use cases include: auto racing, automotive parts manufacturing improvement, corporate cyber security, regulatory compliance (incl GDPR), pharma/drug development, and airline route optimization.
> but if you look at their customers then it’s clear that the ones paying them the most are secretive government agencies ande it’s been that way since day 1
Yeah this is conjecture, at best. Nobody disputes that Palantir works with the government, but you don’t have enough information to claim with certainty that they work only with the government, and how much of their revenue comes from the 3-letter agencies. Unless you can actually substantiate your claims, these are just unfalsifiable hunches.
Its not conjecture. Here are the numbers from their S-1 which apparently you did not read:
1. "We generated $742.6 million in revenue in 2019"
2. "The total remaining deal value of the contracts that we had been awarded by government agencies in the United States and allied countries around the world, including existing contractual obligations and contractual options available to those government agencies, was $1.2 billion"
3. "We do not include government contracts totaling $2.6 billion, as of June 30, 2020, that we have been awarded where the funding of such contracts — also known as indefinite delivery, indefinite quantity (“IDIQ”) contracts — has not yet been determined."
So they have 1.62 years of committed revenue from governments and 5.12 years of revenue including the IDIQ contracts. Even assuming the contracts are spread over five years, which seems to be their long term contract length, it indicates their revenue is overwhelmingly from the government.
-----
As for Palantir Gotham being for government agencies, here is the language from their S-1:
1. "We built Gotham, our first platform, for government operatives in the defense and intelligence sectors...Gotham is now used broadly across government functions."
2. "Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, and helps U.S. and allied military personnel find what they are looking for. We later found that the challenges faced by commercial institutions when it came to working with data were fundamentally similar. Companies routinely struggle to manage let alone make sense of the data involved in large projects. Foundry was built for them."
See how it says Foundry was built for commercial and Gotham for "government agencies"?
Your numbers don't directly answer the question at all. You're just quoting their government contract volume. That's well and good, but we're talking about the degree to which Palantir works exclusively with the government.
Let me just pull the relevant quote from the S-1 directly for you:
> In 2019, 53% of our revenue came from commercial customers and 47% came from government agencies.
It's on page 88, in case you didn't make it that far.
Saying their early investor was the CIA isn’t exactly controversial. It’s cited in almost every article about the company. When something is that widely known, it’s usually not cited.
Title: CIA-backed Palantir adds $50M to its war chest
“Palantir's backers include the CIA's In-Q-Tel venture fund and Thiel's Founders Fund. Its customers include government intelligence agencies such as the National Security Agency.”
Google In-Q-Tel and Palantir and you’ll find 100 other articles about it.
The "sole" purpose (again, their website shows a ton of other use cases) appears to be to assist elected governments in violating somebody's rights/privacy. From where I sit, elected governments decide what's "socially useful".
Alex Karp's CEO letter makes a similar point:
"The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires."
Sure, but they still consult with the CIA and other 3 letter agencies to tailor their tools for them. It doesn't matter what else they do, they are already tainted.
No one and everyone decides what is socially useful. But it's fairly uncontroversial that invasion of privacy is not socially useful.
Elected governments decide what is socially useful. And for better or for worse, the polity has decided that the government ought to engage in the invasion of privacy of foreign adversaries.
“Socially useful” is well and good, right up until you disagree with the masses what constitutes “socially useful”. Silicon Valley engineers have input into that decision, but don’t get the final say.
Elected governments lose that ability when they hide what they are doing from their voters. Then they just become ordinary hierarchs.
Also, the NSA and CIA are act unconstitutionally and then hide the fact they are doing so from the voters. A fairer way to see if there is actually public support would be to allow a group of 100 people into the CIA/NSA archives and allow them full access to the entirety of the uncensored information, without anyone to justify what they have done beyond what has been recorded.
Otherwise, polling people on what unaccountable agencies do illegally in secret is (figuratively) like asking a North Korean if Kim Jong Un is doing a good job. They just don't have the information to judge.
> when they hide what they are doing from their voters
This is literally the premise of clandestine agencies, and it’s not a new concept. They’ve been around for 50 years now. This isn’t some bait-and-switch, voters have always known what a clandestine agency is.
I understand that there exists some voters who don’t believe that clandestine agencies should exists. Unfortunately, such voters are in the minority. And unfortunately the majority of Americans find clandestine agencies (and in general, a strong defense) to be “socially useful”.
Sure, but by definition clandestine agencies cannot have public approval because there is no way for voters to know whether they should approve of it or not. It is purely a question of trust. You just can't play that card.
> but by definition clandestine agencies cannot have public approval because there is no way for voters to know whether they should approve of it or not.
Again, I am directly refuting that argument. Voters can approve of clandestine agencies if they sign onto the fact that there exists some organs of the government that engage in secret activities unbeknownst to the public. What you are saying would only be correct if at first voters expected to be privy to the activities of the clandestine agencies, and then that happened to change. That has not been the case.
I have provided you an actual poll that asks users "do you approve of these secret agencies (that have always been secret)". When presented with evidence that voters do approve of that, it's a bit of a hack to say that it's literally impossible for voters to approve of it. Not every voter in America is a progressive programmer that subscribes to the EFF's world view.
That is not a good metric of democracy. If your only metric of democracy is a poll of an information that actively suppresses information, China is by far the most "democratic" developed country with Western polls showing approval ratings of the CCP at 80+%.
So no, just being polled highly is not sufficient for something being democratically sanctioned. If you want to know if the People agree with what the CIA does let 100 people read the entire archives uncensored without any further justification and see what you get.
I think "mining" here is used rather carelessly.
In the quote, I think he intends it to be read by a general audience as extracting data from some external source, akin to scraping, i.e. mining a source for data. Maybe they don't do that.
But "data mining" is also a term for analysis which finds patterns or insights in a large dataset, i.e. data is the input from which more valuable results are filtered/composed/summarized. I thought Palantir was all about that.
> But "data mining" is also a term for analysis which finds patterns or insights in a large dataset, i.e. data is the input from which more valuable results are filtered/composed/summarized. I thought Palantir was all about that.
Indeed, that definition is definitely how I, and most tech-oriented folks I interact with, would define data mining. First and foremost.
But as stated in a different comment thread above, they don't "do" data mining, they just sell data mining tools and how-to manuals! Totally not the same thing!
>Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe
Too bad the only government department concerned with that is the Department of Energy, and last I checked Palantir isn't a contract partner running any of the national labs.
If you're referring to the fact DOE controls our nuclear arsenal, then sure. Not a lot else at DOE directly contributes to national security that I'm aware of.
They sure do fund cool basic science research though.
These financials are awful for a software business. Gross margin of 67%, even with pilot costs lumped into Sales&Marketing. If you add these pilot costs to COR, you'd get better numbers manufacturing furniture.
-- 2019 Financials ('000s)
Revenue: 742,555
Cost of Revenue: 242,373
Gross Profit: 500,182
Sales and Marketing: 450,120
-- Sales and Marketing includes pilot costs
"Sales and marketing costs primarily include salaries, stock-based compensation expense, and benefits for personnel involved in executing on pilots and performing other brand building activities, as well as third-party cloud hosting services for our pilots, marketing and sales event-related costs, and allocated overhead. The Company generally charges all such costs to sales and marketing expense in the period incurred."
> These financials are awful for a software business.
That's cuz they're not. They are a hybrid services business that also sells "cloud computing". The are very comparable to Cloudera - they have a proprietary analytics platform that they then customize specifically for the workload. They then charge an implementation fees, on-going "maintenance", and a subscription fee for the "software" (which is basically a highly customized single tenant).
> Gross margin of 67%
Which is still better than IBM or any professional services firm could ever achieve from the government.
> If you add these pilot costs to COR, you'd get better numbers manufacturing furniture.
If you added S&M costs to revenue attributed to a multi-year subscription fee, you'd be called an idiot. Hence why they are probably not in there (could be wrong...we don't know for sure).
I do not like Palantir in the slightest, but this assessment is kinda off.
Their private valuation is more SaaS like, though. Revenue of 724 million, last private valuation of 20 billion, which is a 26x revenue multiplier.
IBM, on the other hand, has a 2x revenue multiplier.
Maybe this isn't the best metric to use, and Palantir does have better margins, but I just can't see these numbers being worth their current valuation as a services business.
Asana's financials are way worse. The margins and revenue growth are useless when they spent 87% of profit on marketing for the last quarter. It seems like it's extremely expensive for them to make new sales and probably not cheap to retain current sales. And even when you take away ALL of those costs, they would have earned less than 1/4 million in the last quarter. If you look at the picture for the whole year it's even more ridiculous -- they would've shown a loss of $14 million in EBITDA if you REMOVED all of their marketing. I really doubt that they'll be able to turn that ship around with any amount of growth considering how much the marketing expenses have grown (36% vs. average of FY2019, or almost 100% y/y).
Why would you mention their revenue growth and gross margin without mentioning their R&D, Marketing, and Sales & Administrative costs. Which have each all doubled YoY. Isn't that misleading?
Their Net Loss went from 51M to 119M. So, in 2019 they spent 127M to generate 76M in revenue and in 2020 they spent 261M to generate 142M in revenue.
Asana and Palantir both have terrible financials. They've both basically doubled their net loss YoY.
It will be interesting to see how many of these IPOing company employees move this year and next to avoid CA capital gains tax. (Asana, Airbnb, Doordash, Lemonade are others).
California taxes capital gains at 13%, and 9 states have none (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming). As an employee, you could save $130,000 on your $1 million dollar gain.
That pays for an awesome rental house in Seattle or the Nevada side of Lake Tahoe. It will be a lot more tempting since you can just ride out covid for a year or so and keep working remotely like you are now. You can time this to your liking since the trigger is you selling the stock, so you can move in 2021 and sell in 2022. Realistically having 1 successful IPO is very lucky, maximizing the return makes a lot of sense.
And I think this is much a much sharper decision than for public company employees. You will have been accumulating stock for 4-10 years and it's been completely illiquid. You get this big hammer of a tax bill when you sell, and it's very tempting to optimize it. This is always happened a little but in covid times, it seems like it will be 10x of the usual. Expect a lot of complaints from Seattle and Austin :-).
You misread that. He or she is communicating their distaste for arming cats. Or possibly (multi)dimensional rotation of cats. Both of these are existential threats.
Kind of. The federal rate is 25% for long term holding. But it’s at that higher income tax rate for holding less than a year. In the best case for a CA resident it will be 25% + 13%. But the worst case is as described.
If your stock options were exercised, you now are a shareholder and you pay taxes in the state of residence at the time of sale. If you don’t live in California (for real) then they aren’t going to be able to tax you on the sale.
RSUs with a double trigger on IPO will still be taxed on vesting as if you were in CA.
I've been downvoted for pointing out the same thing on HN before. A bunch of people who have never been granted RSUs or options on here who consider themselves experts on how those are taxed
But the company has existed for a long time. The higher ups of the company have already vested a lot of stock (which would not be subject to California's reach).
I admit I wouldn't know how options would play out here, but if the reason for the move is 'avoid taxes', they have probably done their due diligence.
It's interesting to compare palantir's risk factor on open source vs pivotals[1]. Palantir takes a defensive posture saying basically that their ability to not contribute to open source without running afoul their licenses is important:
Our platforms contain “open source” software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business.
Where as pivotal says that being an active part of a vibrant open source community is crucial:
If open-source software programmers, many of whom we do not employ, or our own internal programmers do not continue to use, contribute to and enhance the open-source technologies that we rely on, the market appeal of our offering may be reduced, which could harm our reputation, diminish our brand and result in decreased revenue.
Like this makes sense, palantir is a closed source first kinda company and obviously a different value to its customers than pivotal. Kinda interesting to see that manifestation in the risk factors though.
I misinterpreted the value - I assume those were options granted in 2019, but it's not. It looks like he got options in 2015 at a strike price of $7.05. Those were canceled and he got a new stock option grant in 2019 at a strike price of $6.03.
So the $11M is the incremental increase in value of the new options versus the old options.
"The amount reflects the incremental increase in the fair value of the stock option to purchase 12,401,568 shares of our Class B common stock originally granted to Mr. Cohen in August 2015 with an exercise price of $7.05 per share arising from the cancellation of such stock option in exchange for the grant of a new stock option with an exercise price of $6.03 per share on November 6, 2019"
It does say "in accordance with our standard parental benefits policy", but I have no idea if that's standard for executives or standard for every employee.
To be fair, a vast majority of it is in options, to which we don't know the strike. Seems like Robert L. Muglia was just awarded stock outright however.
From a TechCrunch piece[0] a few days ago based on leaked financials:
> The company’s top three customers — which aren’t disclosed — together represented 28% of the company’s revenue for 2019. Its top twenty customers represented 67% of total revenues, with each one of those customers averaging $24.8 million in revenue.
This probably assumes customers as the DoD as one single entity, when in fact they probably have dozens of individual contracts from different sub departments and with different timelines. Which makes it very different from the typical SaaS where the top costumer can just unsubscribe.
> Palantir notes that customers from different parts of the same government department or company are considered separately (Palantir’s example is that the CDC and NIH are both part of the Department of Health and Human Services, but would be billed separately and are thus considered separate customers for the purpose of its calculation).
> Our top three customers together accounted for 33% and 28% of our revenue for the years ended December 31, 2018 and 2019, respectively, and 31% and 29% of our revenue for the six months ended June 30, 2019 and 2020, respectively.
Likely all government entities with 5~10 year contracts. Customer concentration is only an issue when there is a possibility of churn. This isn't the case.
Can anyone explain how the voting structure works?
There's a "class F" of shares which are held only by Alex Karp, Stephen Cohen, and Peter Thiel, with each owning 1/3. Class F has "voting power representing up to approximately 49.999999%".
Does that mean that basically Karp, Cohen, and Thiel have full voting control?
> So long as our Founders [...] meet a minimum ownership threshold on the applicable record date for a vote of the stockholders[...], these Founders will effectively control all matters submitted to a vote of the stockholders for the foreseeable future. This could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support. Conversely, this concentrated control could allow our Founders to consummate a transaction that our other stockholders do not support.
Thanks! I know many companies get away with it, but I still find it odd for shareholders to not have any control. They'll own it but have no say in how the company is run.
I think they will be a good investment. The way the wind is blowing, people will demand a more “hands-off” approach to day to day policing. We will still demand safety in our schools, streets, and public spaces. It can be sold in such a way that we are “saving lives” by using tax revenues to stop putting so many cops on the streets and instead using surveillance tech and automation to bring people to justice.
I’m not saying I want this. But in my eyes it is the inevitable next step to prevent law enforcement events that end in death while still being able to stop criminal activity sometimes before it happens.
Tech eats the world and old methods of policing are ripe for disruption.
OT but: If this wave of (interesting to HN) IPO filings continue, someone ought to create something to make these documents a bit more readable.
Some snazzy CSS selectors + js magic + pdf.js something something perhaps? Because SEC doesn't provide nice PDF's, right? I haven't found anything at least.
I've never seen one, and at this point have gotten so used to finding what I want that it has never occurred to me, but this seems like a nice little bookmarklet idea.
> Financial statements in XBRL also are required as exhibits to Securities Act registration statements that contain financial statements, such as Form S-1 (except registration statements filed in connection with an initial public offering).
And by the looks of the search result pages for Apple [1] and Palantir [2], it looks like they haven't filed it that way (the "Interactive Data" label is missing):
Slightly OT, but I'd love to have a "tweakable" mutual fund. I'd love to cut out companies like Palantir and Facebook and sectors like O&G from my primarily index-based portfolio. Without being stuck with other people's decisions (and high ER) in an ESG fund or managing a whole bunch of individual stocks.
Because you're asking your portfolio manager to make you a custom index fund. The whole point of an index fund is to spread risk among lots of companies and sell fragments of that risk to lots of people. You can make your own custom index fund, it's called buying a share of every stock other than the ones you don't want.
You could slap together a script that tracks the current ratios of a given index fund, then maintain a blacklist of baddies, and automatically buy at the new ratio using something like alpaca.markets api for buying. You'd get all the expertise of whoever designs your index of choice but your custom little changes for removing companies you want to ethically avoid.
You could short them to the same weighted percentage that they exist in the index but that's of course not completely simple and you have to pay fees for the shorted stock. If O&G had a convenient ETF (I don't know if there is or not, I imagine there is), you could short that rather than individual companies.
Shorting Facebook would be... interesting for your returns.
My employer was a customer of theirs for a few years. Horrible service, our support pushed down in favor of their government contracts, etc. Grapevine says that they do some pretty shady stuff for the gov as well.
They are a tech consulting company masquerading as a startup.
The platforms don't exactly work without a shit ton of Forward Deployed Engineers trying desperately to make their platforms work with their client's tech systems.
This shouldn't have been downvoted and here is why: there is a mad dash for liquidity by corporations who expect to have cash problems Q42020 through ??. You're seeing it in S1's, credit-line drawdowns and bond issuance.
An infrastructure bill was badly needed in Q2/Q3 to have impact in time. As it stands now it will hit too late and another round of USGOB aid will be needed by companies small and large. This will happen regardless the extent of fall and winter quarantine needs.
The inability of Congress and the White House to put politics aside is going to cost American workers and companies dearly. It will not have been worth the political gains either side expects.
There was never a time in this Country's history that bipartisanship was this needed, at least since WWII. The failure defies words because even in less critical times names like Baker, Johnson, Dole, Rayburn, O'Neill, Rostenkowski and others - some corrupt - put self-interest aside briefly to conduct the country's business.
We are to blame by the way. The HN community is comprised of many bright, successful and/or wise folks from all political spectrums. We're either caught in the partisanship, or we're silent and checked out.
"The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires."
Wait, what did they do or know about organizing society ?
What's truly incredible is how much is spent on Sales/Marketing. It's not like they're marketing to millions of small businesses or hundreds of millions of consumers.
They have 125 customers. Even assuming everey single one of them came online last year, we're looking at millions of dollars each?
That's a lot of…bribes? Idk even know what could cost that much.
I read about some company recently (unsure whether it was Palantir - in fact Improbable is ringing more of a bell) that they put a huge amount of engineering effort into proofs-of-concept for many potential customers. Effectively half-solving every potential customer's problems could plausibly consume such a huge budget and could plausibly be labelled "sales and marketing".
The company I work at follows that queue. Engineering might not build anything custom for new clients, since it's a software platform product, but Sales Engineers invest heavily into building turn-key solutions to their clients' problems using our platform. I just finished a project allowing our own sales people to duplicate their efforts into the actual system once the customer is converted and they estimated that simple copy operation would save them 500 hours a quarter. That's a ton of investment for a company of my employer's size. If we're talking about a company like Plantir, whose primary engineering workforce is, "Implementations Consultants", then that absolutely makes sense. Especially since those are government contracts, which can attach strings to the proposal requiring proof the bidder is capable of doing what they promise.
I heard from some friends that work there that over the last two years, they have been offering very large discounts on 5+ year deals if they were paid for upfront. One can assume that this is to shift revenue into the pre-IPO financial years so they can show this level of growth in their S-1
Thanks. For my understanding, what’s the standard definition of “when it is earned”? If it’s a 5 year contract must all revenue associated with that contract be spread across all 5 years?
There are rules around revenue recognition [1]. These rules provide guiding principles, and there's some human judgment involved in ironing out the details. Its almost certain that the revenue would be spread over the life of the contract, but it's possible that the contract has some growth baked in, so the latter years may be more heavily weighted than the early years.
You can see how much prepaid money is "waiting" to be recognized by looking at Deferred Revenue on the balance sheet. $263 million at the end of 2019.
paulgb.... just want to point out that accounting for long-term contracts is a standard way to manipulate earnings (and nearly everyone has been dinged for it at one point or another).
I think they mean that bringing in $742M and losing $579M is a pretty terrible ratio. The raw numbers are large, but looking at dollars in vs. dollars out, you're damn far from making any money.
The important thing to realize is that they're a services company, not a software company. A services company that has lots of people who use software to deliver (somewhat) useful conclusions from data.
I don't think they'll ever be "stamping out software" with its associated margins like a SaaS or traditional software company.
This might be a stupid question, but how long does it take to write an S-1 prospectus, and how many people are generally involved? They are always so long and with tiny font!
I'd guess that a lot of the delay comes from auditing and then getting someone at the SEC to actually read your filing before publishing it. In terms of how many people are involved, this might help give you an idea: "We have engaged Morgan Stanley & Co. LLC (“Morgan Stanley”), Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Allen & Company LLC, RBC Capital Markets, LLC, Citigroup Global Markets Inc., Jefferies LLC, HSBC Securities (USA), Inc., SG Americas Securities, LLC, CIBC World Markets Corp., Scotia Capital (USA) Inc., and MUFG Securities Americas Inc. as our financial advisors."
Not a stupid question, it's basically the job of the Investment Bank to help company management, the auditors and company lawyers to pull it all together. It's one of the main things they hang their traditional 7% fee on. I'd say in a good process the company would take a year or two of clean up and positioning of the financials and the corporation and then solid 6 months with the bankers (and accountants and lawyers) of drafting "the story" and getting all the boilerplate together.
I don't remember ever seeing this many S-1 listings on HN. Are they just a new thing? Did I miss them before? Is there something large happening in the market?
I've seen a theory that companies are trying to get IPO'd now, in anticipation of a weaker market in the future.
I think this theory tends to be based on the idea that the current state of the stock market does not reflect reality for many businesses (and the economy as a whole), nor their future prospects, and that a correction is imminent.
Obviously this is speculation, but it's interesting because someone probably does know - there's probably some overlap in the advisory banks for these IPOs, and they must have some idea of the thinking of the executive teams of these companies.
There are also lots of SPACs (Special Purpose Acquisition Companies), like 27 of them just in August. A simple way of entering public markets bypassing the regular IPO path and required filings.
These just made it on to HN as there were some big names in the mix (Asana, AirBnB, Unity, SumoLogic, Snowflake, Palantir, etc). Now, its not clear to me why all of these larger tech companies are going for it this week however...
Really though, S-1 is the old Show HN. In the dot com bubble, companies would go public before they built the product. The only company I heard of doing that recently was Nikola, and they didn’t go through the IPO process.
The issuers doing S-1's are just of public interest and in the same circuit of companies that many people on HN consider joining or use the tools of. As such, many people have been interested in their shares being publicly traded for a long time.
IPOs have become less common due to regulations as well as adequate growth of the private secondary market following more coordination by accredited investors, but they used to be 3x more common and at much lower valuations.
look at the stock market - never in history have we ever reached new all time highs that keep getting smashed every day during a recession. the Federal Reserve printed trillions over last 5 months to save the markets.
now we just have to wait and see what the “cost” of it all is because we’re all treating it as a free lunch
It is probably not going to crash before the election - although there could be temporary dips. Unless the October surprise turns out to be particularly dire.
After the election, it probably will. No matter the result.
TLDR, comparing the year-to-date, tech IPOs are on the high end historically, but not outlying the historical range (I make it just in the top quartile for IPO count). Considering all IPOs (tech and non-tech) though, there are more than any time in the last 15 years.
So yes there are more IPOs, but that doesn't explain why there are more tech IPOs being posted on HN.
That's what someone suggested on one of yesterday's IPO listings. A massive stock crash seems, uh, reasonable to expect. If owners are cashing out before things go south seems reasonable. Also depressing.
I've been really reminded of the Big Short, housing market shot up before the big crash so others would be left holding the bag... musical chairs isn't just for preschoolers I guess.
Not a lawyer but was an investment banker and took a few companies public. There's a lot that is standardized to start with (at least within a firm), but gets heavily modified as necessary for the company.
A draft is created, and then the company's executives, their legal, the accountants, investment bankers, and investment banker's legal all get in a room and go page by page through the document for several days. The legal team stays up late making the edits each night. Then it gets submitted to the SEC for review, and you get comments from them that have to be addressed. You submit the revised document with responses to their comments and keep doing that until the SEC has no comments.
The statements on never having paid and not intending to pay dividends is definitely a copy-paste :) I find the links in the summary to be valuable to check: letter from founders, use of proceeds, executive compensation, and summary with revenue&profit numbers. The CureVac S-1 [1] had lots of interesting details on the unique technology, methods, approach and early results, etc.
"The engineering elite of Silicon Valley may know more than most about building software. But they do not know more about how society should be organized or what justice requires.
Our company was founded in Silicon Valley. But we seem to share fewer and fewer of the technology sector’s values and commitments.
From the start, we have repeatedly turned down opportunities to sell, collect, or mine data. Other technology companies, including some of the largest in the world, have built their entire businesses on doing just that.
Software projects with our nation’s defense and intelligence agencies, whose missions are to keep us safe, have become controversial, while companies built on advertising dollars are commonplace. For many consumer internet companies, our thoughts and inclinations, behaviors and browsing habits, are the product for sale. The slogans and marketing of many of the Valley’s largest technology firms attempt to obscure this simple fact."