As Palantir COO Shyam Sankar explained, such a heavy investment in gold is a hedge against ‘black swan events’.
While most tech companies are investing in Bitcoin (BTC) and other digital assets, US software company Palantir Technologies Inc (NYSE: PLTR) prefers to rely on traditional assets like gold. As its filing for the quarter that ended June 30, 2021 shows, during August 2021, Palantir purchased $50.7 million in 100-ounce gold bars.
According to Palantir, it will initially keep the gold in a secure third-party facility located in the northeastern United States. The company can take the gold bars stored at the facility at any time with reasonable notice.
As Palantir COO Shyam Sankar explained to Bloomberg, the investment is a hedge against economic crisis.
“You have to be prepared for a future with more black swan events.”
A black swan is an unpredictable event that causes severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and widespread insistence they were obvious in hindsight. Although black swan events seem to come with a negative connotation, the concept does not only apply to negative events.
Getting back to Palantir, the company’s second-quarter earnings beat analyst estimates. In the period considered, Palantir closed 62 deals worth $1 million or more. Of those, 21 were worth more than $10 million and 30 were more than $5 million. The company has around $2.3 billion in cash and is exploring creative uses for that money. Back in May, Palantir said it was considering investing in Bitcoin. Dave Glazer, the company’s finance chief, stated at that time that there were numerous internal discussions on that matter. Besides, it is taking stakes in startups that are customers of Palantir software. Such an approach helped boost sales results in the second quarter.
Palantir’s Interest in SPACs
As Palantir’s Q2 report shows, the company is expanding its portfolio of investments in companies going public via SPACs, or special-purpose acquisition companies. In particular, of the 20 new customers Palantir added in the quarter, 7 were related to SPAC investments. Palantir invested as much as $250 million in 10 special-purpose acquisition companies in the second quarter. Among them are Babylon Health, Lilium, Wejo, Sarcos Robotics, Celularity, Boxed, Roivant Sciences, and Pear Therapeutics, as well as two other companies identified as an autonomous vehicle company and a mobility company. The filing shows that the transactions took place between March 30 and June 22. However, they have not been completed yet.
In addition, since the beginning of the third quarter, Palantir has earmarked an additional $60 million towards new SPAC investments. This included $20 million for cloud manufacturing platform Fast Radius, $15 million for EV charger developer Tritium, $15 million for AI advertising software company AdTheorent, as well as $10 million for Asian-based financial services company FinAccel.