Palantir’s selloff isn’t about Karp cashing out or the Pentagon’s budget being slashed. The reality is much simpler: bubbles burst, and Palantir was sitting on one of the biggest.
Across every metric, this stock was ridiculously overvalued. It was only a matter of time before something triggered the inevitable crash. The bulls are scrambling now, but even if $PLTR drops 50% from its recent high, it’s still not a buy. This was a ticking time bomb.
Let’s break it down: Palantir posted a $77 million net profit last quarter, but $55 million of that came from interest income. Only $22 million came from actual operations. Let that sink in. This company doesn’t really make money.
The stock’s market cap is a staggering $236 billion, and for what? A meager $22 million in net profit from operations. This is what you call a bubble. A stock propped up on hype, not fundamentals.
And don’t forget Palantir’s attempt to hide the exit of its Chief Accounting Officer, Heather Planishek, in the 10-K filing. They’re hoping no one notices the red flags.
But it gets worse. Palantir’s free from boring old accounting rules. No more worrying about profits, transparency, or anything that might remind investors of actual business reality. Just good storytelling—and we all know how well that works on Wall Street.
Then there’s the insider selling. $3.1 billion in 2024 alone, with insiders bailing while retail investors are left holding the bag. That should tell you everything.
Albert Edwards nailed it when he said: “Notwithstanding the ‘blips’ from games played around reporting rounds, analyst optimism for the S&P 500 has been a series of lower highs and lower lows. Both the 6 and 12-month moving averages are now turning down.” Palantir’s selloff is just a small part of the larger market shift that’s about to play out.
Sources:
https://x.com/TheLongInvest/status/1887084898185306154
https://x.com/Stocktwits/status/1892228153801650190
https://x.com/LanceRoberts/status/1892539912223617269
https://x.com/Mr_Derivatives/status/1892576531957854502