When Palantir was wildly favored by retail investors, the CEO was continuously "cashing out like crazy."

In recent years, the stock price of data analytics company Palantir has soared, attracting widespread attention from the market. However, just as retail investors are enthusiastically buying in, Palantir's CEO Alex Karp has quietly been conducting large-scale stock sales.

According to a report by the Financial Times on the 13th, since the beginning of 2024, Karp has sold $1.9 billion worth of Palantir stock through the company's stock sale plan, making his sales second only to Meta's Mark Zuckerberg.

In contrast, the scale of stock sales by executives of other tech giants is much smaller. For example, Apple's Tim Cook, Google's Sundar Pichai, Amazon's Andy Jassy, and Microsoft's Satya Nadella each sold between $30 million and $80 million worth of stock. Karp's cash-out is astonishing, even more than twice that of NVIDIA CEO Jensen Huang.

Notably, Karp also plans to sell another 10 million shares before September 2025, which, at current stock prices, is valued at approximately $800 million.

Meanwhile, Palantir's market performance has also been quite remarkable. Since its IPO in 2014, the company's stock price reached a historical high of about $125 in 2023, with an annual increase of up to 350%. Although the stock price has recently retreated due to market volatility and concerns over defense budget cuts, the company is still up 11% year-to-date. Karp's current holdings are valued at approximately $12.8 billion.

Concerns About the "Passive" Strategy

Palantir was co-founded by Peter Thiel and entered the public market through a direct listing in 2020, a move interpreted by Mike Green (Chief Strategist at Simplify Asset Management and a critic of passive investing) as the company quickly entering the "fast lane" to the S&P 500 index.

In September 2023, Palantir was successfully included in the S&P 500 index and subsequently moved from the New York Stock Exchange to NASDAQ, further integrating into the NASDAQ 100 index and attracting significant attention from retail investors. Palantir's business model primarily provides data analysis and intelligence services to government agencies and large enterprises. The company's success largely depends on its technological strength and deep collaboration with clients.

Palantir's "passive investment" strategy seems to be working. Before being included in the QQQ index, the three major passive investment giants—Blackrock, Vanguard, and State Street Global Advisors—held 22.23% of Palantir's stock, surpassing that of Microsoft, Apple, and NVIDIA. At the beginning of 2024, Palantir became the best-performing stock in the S&P 500 index, with its stock price soaring over 300% in 2023 However, since February 18, Palantir's stock price has fallen by about 38%, making it one of the biggest decliners in the market. Green believes that while passive investing drives stock prices up through regular purchases, when the market begins to weaken, the lack of active managers to hedge can easily lead to "severe volatility."

Now, Palantir is one of the most actively traded companies, alongside Nvidia and Tesla. About 100,000 retail investors are discussing Palantir stock trading on the social media platform Reddit, referring to Karp as "Daddy Karp" to express their admiration, believing that his statements and actions have helped boost Palantir's stock price.

A "Maverick's" Counterattack

Palantir's CEO Alex Karp is known for his unconventional statements and behavior. He has criticized analysts who criticize Palantir and has been quite provocative on social media. He once stated that he "likes to spray critics with urine laced with fentanyl from drones."

Alex Karp

Karp's "outlandish" remarks initially unsettled Wall Street, but are now seen by some investors as those of a "maverick hero." In a February earnings call with investors, he stated:

"Palantir exists to disrupt, to make... the institutions we work with the best in the world, and to scare enemies when necessary, and sometimes even kill them."

In addition to attacking analysts, Karp also commented on Musk's plans to cut federal government spending:

"This is a revolution, and some people will lose their heads."

However, Palantir is quite popular among Peter Thiel and Trump supporters. One investor stated:

"Palantir's stock price is rising because people expect Trump to win, and government departments will cut contracts with traditional defense contractors and transfer all contracts to Palantir."

It is worth noting that U.S. government business accounts for about 60% of Palantir's total revenue