a lot of shops do this. The most obvious example of this practice are car financing companies such as Ford Motor Credit and its ilk. I am not aware of how abusive (i.e. terrible underwriting standards) Lucent was using for this technique.
The issue with the Palantir strategy is that the borrowers weren't actually borrowers, they sold often-times worthless equity to Palantir. And now Palantir cannot get its money back. Quite frankly, I don't know how Palantir investors were OK with the Palantir balance sheet getting loaded up with highly speculative investments. Growth at any cost, I guess.
Mirrors the way that Thiel decided to invest in Palantir in the first place… just ignored the fund direction and didn’t consult LPs before moving the entire thing into a single company:
> I don't know how Palantir investors were OK with the Palantir balance sheet getting loaded up with highly speculative investments.
Isn't the way this works that Palantir forms a partnership where it is the sole limited partner, hires a general partner or two, and then funds it? So the Palantir balance sheet just shows a single asset (the partnership interest)?
The issue with the Palantir strategy is that the borrowers weren't actually borrowers, they sold often-times worthless equity to Palantir. And now Palantir cannot get its money back. Quite frankly, I don't know how Palantir investors were OK with the Palantir balance sheet getting loaded up with highly speculative investments. Growth at any cost, I guess.