Alex Karp, chief executive officer of Palantir Technologies, in 2019.
Drew Angerer/Getty Images
In the stock market, some things are just hard to figure. Actions by companies don’t seem to fit a strategic narrative. And what investors do with the endless feed of information can be difficult to predict. There is so much data available that investors should remember not every tidbit matters.
It turns out the data-analytics firm Palantir Technologies (ticker: PLTR) was an early investor in electric vehicle maker Faraday Future Intelligent Electric (FFIE), to the tune of about $25 million.
That seems to be the reason Faraday stock was up 2.5% in premarket trading Friday, even though the stake is tiny. S&P 500 and Dow Jones Industrial Average futures were up 0.3% and 0.2%, respectively.
Palantir’s holding of 2.5 million shares showed up in a recent registration statement related to potential stock sales by early Faraday investors. Palantir, according to the filing, plans to sell out of its position.
Palantir and Faraday weren’t immediately available to comment.
It is an odd discovery for EV investors. Palantir has a $49 billion market value and about $1.6 billion more cash than debt on its books. Associating with a successful, cutting-edge software company might have a benefit for Faraday. Palantir appears to have some interest in the EV industry, but the company is clearly more interested in selling software than picking winners and losers among new EV players.
“We’re looking at companies in cell-based therapeutics, biomedical healthcare delivery, quantum computing satellites, electric vehicles, delivering worldwide intelligence from space and a lot more,” Palantir head of business development Kevin Kawasaki said on the company’s second-quarter earnings conference call. “Now these are companies that have cutting-edge technology of their own, and they’re choosing Foundry to help drive their vision forward. And we think many will follow and our strategic investment program accelerates this.”
Palantir is also participating in a PIPE, short for private investment in public equity, raising money for the EV charging company Tritium, which is merging with SPAC Decarbonization Plus Acquisition Corp II (DCRN).
The Palantir bump for Faraday will likely fade. Faraday’s success will ultimately be tied up in its ability to produce and sell its first FF 91 ultraluxury sedans. Barron’s has taken a ride in a prototype. It felt like a EV Maybach—perfect for being driven around in if a buyer has the money. A FF 91 will cost upward of $180,000.
Write to Al Root at [email protected]
