(Yahoo Finance) – Big data consultancy firm Palantir (PLTR), which got its start 17 years ago as a private company contracting with government agencies on often secretive projects, finally became a publicly traded company Wednesday via a direct listing on the New York Stock Exchange.
In its debut, shares opened for trading at $10 to value the company north of $20 billion on a fully diluted basis. Now, the uniquely private company begins a new chapter under the lens of the public eye which could invite new criticism over the way it uses its technology. Only recently did Palantir finally pull back the curtain to give investors a full look at how it makes money, with roughly half of its revenue coming from government contracts like its controversial partnership with the U.S. Department of Homeland Security and the U.S. Immigration and Customs Enforcement (ICE).
The company, however, has distanced itself from others in Silicon Valley by refusing to work with one country in particular: China. Palantir even documented its refusal to work with the country and its communist government in its SEC filings to go public, saying it’s “inconsistent” with the company’s culture and mission. As Palantir co-founder Jon Lonsdale told Yahoo Finance in an interview Wednesday, drawing that line in the sand and facing criticism on government projects is a challenge Palantir is well aware of.
“Any company — and there are thousands of companies that work with the DOD and that work with ICE, and that work with others — is going to face these challenges,” he said on Yahoo Finance’s YFi PM. “I’m very proud that Palantir is sticking to working with America and America’s interests.”
Critics of the company’s stance were quick to point out that the potential to use, or misuse, technology for nefarious purposes is not a uniquely Chinese problem, nor one that the U.S. is necessarily removed from. Ahead of Palantir’s debut, human rights group Amnesty International issued a statement calling out the company’s logic.
“Palantir touts its ethical commitments, saying it will never work with regimes that abuse human rights abroad,” said Amnesty International’s Silicon Valley Initiative Director Michael Kleinman. “This is deeply ironic, given the company’s willingness stateside to work directly with ICE, which has used its technology to execute harmful policies that target migrants and asylum-seekers.”
Activists protest outside the Palantir Technologies software company for allegedly helping ICE and the Trump administration in New York City, U.S., September 13, 2019. REUTERS/Shannon Stapleton
Activists protest outside the Palantir Technologies software company for allegedly helping ICE and the Trump administration in New York City, U.S., September 13, 2019. REUTERS/Shannon Stapleton
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As Palantir noted in its filings, there is a risk that the blowback to some of its government work could hurt the company as it seeks to sign up more corporate clients looking to use technology to solve complex data problems. Lonsdale pushed back on the direct tradeoff, noting that things are never as simple as critics like to make them appear.
“Should the company have done a contract with the Obama administration along with lots of other contracts as it did to work with ICE? I think that was the right choice overall,” he said. “I happen to know the company working with ICE has actually helped stop huge numbers of child traffickers and prevent all sorts of crimes, so I think people misunderstand actually what the company is being used for there.”
As Palantir moves forward as a public company it will have the luxury and responsibility to provide a bit more clarity in quarterly investor updates. For the time being, investors seem to be betting it can continue its growth trajectory while keeping its eyes focused on opportunities outside of China, regardless if they carry some level of controversy.
Zack Guzman is the host of YFi PM as well as a senior writer and on-air reporter covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance.
