Palantir also revealed that it closed the quarter with $1.62 billion in US Treasury securities.
Software company Palantir Technologies (NYSE: PLTR) has sold all the gold bars it acquired in August 2021. The company invested $50.9 million to buy 100-ounce precious metal, which it said will be initially kept in a secure third-party facility in the northeastern United States. At a time when many companies put their money in Bitcoin and other digital assets, Palantir said the gold bars investment was a hedge against economic crisis. The crypto market was booming during the period, and other tech companies pumped cash into equity investments and even BTC. However, Palantir decided to bet on gold bars, noting that it could “take physical possession of the gold bars stored at the facility at any time with reasonable notice”.
Palantir Dumps Gold Bars
The company’s chief financial officer Shyam Sankar said it was necessary “to be prepared for a future with more black swan events”.
Less than two years after purchasing gold bars, Palantir has bid farewell to the precious metal. The company announced the sale in its Q1 financial filing, noting that it resulted in “immaterial realized gain” on its statement of operations.
“During the three months ended March 31, 2023, the Company sold all of its gold bars for total proceeds of $51.1 million.”
The alarming inflation in mid-2021 through mid-2022 took a toll on both individuals and organizations. The princess and food and cost of energy soared from the high levels there were in the middle of 2021 till mid-last year. As a matter of fact, the YoY consumer price index peaked at 9.1% in June, above the Dow Jones estimate of 8.8%. Since then, the numbers have steadily declined to 4.9% in April. Although it was less than expected, it represented the slowest pace since April 2021. The price of gold has increased more than 12% since early August 2021, while the S&P 500 has plunged around 6% over the same period.
Palantir’s US Treasuries Securities
In the same press release announcing the gold bars sale, Palantir revealed that it closed the quarter with $1.62 billion in US Treasury securities. This accounts for over 50% of its cash, equivalents, and short-term investments.
“Cash equivalents primarily consist of money market funds and US treasury securities with original maturities of three months or less, which are invested primarily with US financial institutions. Cash deposits with financial institutions, including restricted cash, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.”
The disclosure came after the Federal Reserve increased its benchmark rate for the 10th time in a little over a year. The Fed raised the rate by another 0.25 percentage points.
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