so let's talk about what can only be described as a hit piece against palantir by cnbc and i hope everybody's enjoying this saturday morning i am now check this out cnbc put out a very long video with mr sorkin and his guest i don't know who the guest is talking about how palantir basically had their insiders sell one billion dollars worth of shares in the height of the price action on talenteer in 2021. so the whole narrative of this piece was that while everybody was gaga about this company these guys were heavily selling it off and all the way to one billion dollars worth of sales while the retail investors got screwed now here's what they're not telling you because this whole narrative is complete garbage bs and i'll explain so here's the story here so basically we had this plan that was granted to alex carp about 12 years ago in 2010 and in that plan he received 16 million shares of volunteer for cents on the dollar i delivered something ridiculous pretty much for free and you have to remember in 2010 i mean the company was pretty much you know an esoteric government contractor private company a lot of liquidity i mean it is what it is now a year later in 2011 he got another grant of another 10 million shares i believe so in total 10 plus years ago he got 70 million shares of volunteer now the expiration date on this was i believe december 3rd of the top of my head december 3rd 2021 so unless he would have exercised meaning that unless he would have purchased the shares based on the option agreements that he had these option agreements would have expired on december 4th 2021 which means that if he wanted to buy these 70 million shares of valentine he had to do that by no later than december 3rd 2021 and much like alex carp i'm assuming sean sankar and stephen cohen and a lot of the other insiders had similar plans i'm assuming with smaller amounts but the idea was very very similar so basically what happens in the situation that's what they're not telling you which is i think an atrocious way of reporting about this is that basically alex carp had to exercise all those options by december 3rd 2021 and he did so when he did that he basically paid tax on the market price of the shares so if you exercise 70 million shares at a market price of about 24 dollars per share which it was back in the day that means you're in the hook for about 1.8 billion dollars of taxable employee benefits which is pretty much like salary so you're getting taxed at his tax level with state tax and whatever i don't know if it's california state tax or colorado whatever it is i don't know it's probably close to 50 because it's an employee benefit it's not a capital gains tax so you're on the hook for hundreds of millions of dollars probably close to 700 800 million dollars of tax on these employee options exercise i have to understand that there's no money coming in i just want to explain this when you exit the options you're actually paying money you're paying whatever i know 20 30 cents per share to buy the shares so you have an expense you're buying a lot of shares and then you have to pay tax because the government sees this as a benefit from the employer to you rightfully so you're getting shares for 20 cents that are worth 20 right so the difference between the couple of cents that you pay per share to buy it and the market price of the share is a benefit to you so you should be taxed for that 100 i have no problem with that but the problem is that for the recipient of the options in this case alex carp steven cohen and champs-anchor there's no money to pay i mean none of them have 800 million dollars or more i believe it was a billion in total with all three of them included so and that's common practice anybody who's in this industry will tell you that this is common practice what needs to be done in this situation is that you exercise the shares sorry exercise the options and you sell shares in an adequate amount just to pay the tax because i mean if they wanted to sell more shares then just to pay the tax they would have sold at a higher amount sorry at a higher rate not just the tax now look i know it sounds convoluted but i'll explain a second so basically now going back to the cnbc article so cnbc told you that all these insiders sold one billion dollars worth of shares now i just showed you that alex carp alone hit what seems to be like close to 800 million dollars worth of tax bill if you add on top of that i don't know exactly how much maybe it's less me i just sped on my phone whatever i don't know probably more probably less i don't know but he had a couple hundred million worth of tax bill to pay and that's indisputable what exactly the amount was i'll just assume 800 million for the purpose of this video for simplicity and if you add in sham sankar and steven cohen it's probably close to a billion it's exactly the number that cnbc told you that they sold so what happens is you sell shares and you take the proceeds from these sales okay and then you essentially pay taxes with it but the one thing you have to realize is when you sell these shares you also have a tax liability on that that's capital gains tax rate so you're selling you're generating another taxable event you're paying off capital gains tax and the remainder is being used to pay off the tax on the employee options exercise so the entire narrative here one billion dollars worth of insider sales in 2021 is just employee stock options exercises and selling just enough to pay the tax bill that's it there's no extra money i mean alex harp isn't a billionaire he doesn't even qualify as a hundred millionaire at this point i don't believe so i mean his salary is about like a million a year i mean he's wealthy and i'm sure he's doing just fine and he's going to be extremely wealthy one day when he sells the shares but he hasn't gotten any new money so these sales is just to pay the taxes on the options and i don't know why cnbc refused to talk about it because this is literally common practice elon musk did it every single founder did it it's not unusual now the other thing they talked about is the delusion and they'll pull up these charts showing you the dilution of the shares and palantir and they'll share world volunteer in 2018 had 600 million shares and now they have two billion shares that's not good but what they don't tell you is that from 600 million shares to 1.75 billion shares that's just the dpo when the company decides to go dpo which means direct public offering and not ipo not initial public offering by the way ipos screw the retail investors and dpos are equal opportunity kind of game that's why you do it you try to benefit the retail investor so when you go the dpo route employees get more stock so they can create the market because the only ones who can create the market is the current shareholders and employees so basically 1.75 billion shares was the result of the dpo and that has nothing to do with the investors that actually bought it in the free market because i mean they were already buying it post this delusion that happened before the dpo now there's more things that happened that added to the solution because they they went i believe all the way to 2 billion shares 2.1 billion shares as alex carp actually got a new plan for the next 10 years which expires in 2030 i believe or 2031 and that new plan adds more stock-based compensation but again standard stuff all i gotta say about it and just look at the dilution it's still diluting quite heavily um i they're still deluding about 10 per quarter which is a heavy dilution but it's not like they're not like doubling the share the share count every quarter why they still heavily diluting 10 percent water is a big delusion i'm not gonna lie it's because they're setting up a whole new sales department which did not exist until like a year and a half ago so there's a lot of stock based comp that's involved in that as well now there's a third criticism that is not being made against palliative which i'll make here as devil's advocate here which i again i don't know why they would not explain this so the one criticism you could have against volunteer is basically saying well look alex carp had all these shares expiring in late 2021 what happens if the company does not go public he has to exercise them and he has to sell in the private market to pay for the tax and the amount of money he would have gotten in the private market would not have come close to what you get in a liquid public market so potentially you could say that their decision to go public in october 2020 a year before the expiration of all these options was driven partially by the desire of insiders to essentially get a better price and for the stocks they're selling to pay the tax on the options exercise and potentially it may have been one of the causes because i mean another potential reason would be the insanely good market because as you remember in october 2020 the market was incredibly good and if it takes six months to plan an ipo or dpo this case and they started in march it seems like they rode the wave as well but there's a lot of companies that did that volunteer wasn't the only company who tried as a company you always trying to you know go public when the market is the best it's just good business and i don't think it's a huge problem but i mean these things should be said and again have not been covered in mainstream media but i can say about it you know just you know don't believe the hype do your own research i actually mean it go read the stuff i mean it's all public information.