Well, this isn't good. Palantir is a five dollar stock. It seems apparently there's a seeking alpha article that just came out claiming palantir should be valued at five dollars per share. So let's do this in a constructive manner.

Now this is not personal. I don't know the guy, i couldn't care less, but let's do it in a scientific manner. Essentially, in this article they use two arguments. That kind of you know branch out into a little different arguments.

So argument number one or the headline number one is that the business is not scalable and thus is not profitable. Argument number two there's too much stock delusion and thus there's not enough in it for you as an investor, because they either just issue too many stock. As stock-based compensation to their employees and directors and officers or they're just selling too much as far as insider selling dumping the shares - and you know, retail investors getting stuck holding the bag. If you read this article, you would think that there's a lot of retail investors getting roped in into this company and getting left with the bag.

The truth of the matter is that, over the past four months, institutional ownership of planetary companies, like blackrock, vanguard, mitsui, a lot of different companies arc, invest a lot of institutional investors are getting into plan t right now. In fact, over the past four months, we've seen a hundred percent increase in institutional ownership from 350 million to 700 million shares within just four months. So that's the first thing. A lot of people don't realize institutionals over the past four months, when everybody was basically going crazy, are buying up a lot of the stock.

You can go to fintel.io and check me on this data. It's actually pretty easy and it's public. So there's no way. For me to make this up now, the second thing i want to talk to you about is what the hell is going on with the profitability of volunteer.

Obviously the company, isn't, you know, generating classic profits and that is being used against them. As an argument of why you shouldn't be investing well, the thing is that you have to understand that operationally palantir is actually profitable. They just had a operational profit of 220 million in the past year, so as far as operationally being profitable, they already are not. To mention that they have over 500 million in free cash flow in the past 12 months now the question is: if they're, generating free cash flow, if they're generating positive operational income, why are they not making a profit for tax purposes? Well, the money is actually going back into the company for various things, for example r d expenses, but more recently they just repaid half a billion of a loan, 550 million dollars of a loan over the course of two years.

They completely eliminated that loan. You know why, if you follow my channel they're prepping for inflation before everybody else picks up on that, so they completely eliminated that now that 550 million could have gone to dividends to the shareholders. The money is going back to make the company more robust. As far as inflationary hedge, and to basically put and invest everything you can get back into the company to build yourself up before the competition will come and make no mistake about it.

The competition is coming for palantir now right now, they're playing solo, there's, nobody out there with a platform like palantirs, there's a lot of different competitors microcompetitors in specific areas, but nobody's competing with them head to head. As far as one software. That does everything one platform. That's about to change now we know how these big enterprise software enterprise businesses work.

They wait for you to make the money they'll swoop in and they'll take your lunch, which is exactly what i think they're planning for palantir. I don't think they'll be successful, because i think valentina's product is so much better their relationships and their ability to offer you credits and you know to basically lost leader their way into your business until they kill the competitors. All of this won't matter if volunteer has a superior product by a few levels. However, that will be a bloody fight, so pilot is prepping for that make no mistake about it and the only way to prep, for that is not give away every cent you have into you know increasing the share price and giving out dividends.

That's a short-term strategy. If you want to do a long-term strategy, as far as you know, thinking of the battles that are there to come, you know you want to kill that and invest in the rnd of the company to widen your lead, which is exactly why they're not profitable the Money is going into debt, elimination, research and development, basically creating a mode creating a lead before the big boys jump in and try to take their lunch. The other thing is, in this article there's a whole different argument. Basically, talking about the fact that palantir is a dilution factory, essentially what they're doing is they're making they're building dilution.

That sounds based on this article. They're deluding you, insiders are selling it's just a you know: it's a festival of bag holding for the retail investors and again another false, but very realistically, sounding argument. If you don't understand, you know how this thing works, so, first of all, a lot of these guys either intentionally or not intentionally - and i don't know which one is worse - they get confused between the outstanding shares as far as the float goes and the fully diluted Bases so let me explain here: i'm not going to go deep into nerdland, but the amount of shares that palantir has issued have not changed since they went public since the dpo. The amount of shares on the fully delivered basis has not changed.

There's the same amount of shares palante did not issue new shares ever since they went public. I want to be very clear about this because you're going to hear, but tom the outstanding shares have gone up, that's called the float. The float is the shelf on which you offer shares to the public, but the amount of shares has not changed. Therefore, every single stock based compensation that was granted in the past year was already taking into account as far as the share count before the company went public.

So not a single share is now worthless because there was no new shares added to the company since they went public over a year ago. However, more shares are getting added to the float. The float is getting bigger, but every share is worth the same because whatever particle it owns out of the company has not changed now confusing. That is probably not as bad as doing it on purpose, but don't let these morons confuse you by not.

You know checking what the actual story is now. The other thing is the story about the insider selling. There's a lot of narrative about how everybody's inside is selling in in palantir. The truth of the matter is it's pre-scheduled, 10 b sales, every time alex harp - and you know any other executive or officer exercises stock options, because these are nso non-qualified stock options and those nsos create an income tax liability, even though you haven't received any money.

So that's why, whenever they exercise they sell half of the stock to pay the tax literally, i mean it's kind of a known thing: elon musk just did it with tesla, which is why it's mind-boggling to me how nobody sees that this is the exact same thing. They actually got the shares even pretty much at the same time about 10 years ago, and when the exercises they actually need to sell to pay the tax, which is exactly every single share that alex harp sold over the past few months. Is it's just a straight up, scheduled pre-scheduled sale to pay taxes on the executions of his options? Now the good news are, if that sort of thing bothers you which it shouldn't, because the sbc is already part of the shake on. But if it bothers you, you should know he already exercised.

All of these. You know batch from 10 years ago, he's done basically mass selling and the next time he's going to go through this selling spree again is about in 10 years because he just received a year ago. Another batch, so you know we'll see you in 2030 with the new fud. So my hope is that this was helpful for you to understand about palantir about their business, about how a five dollar evaluation makes absolutely no sense.

I value the company anywhere from 25 to 35 dollars even more on the high side. I think they'll get there, but i think at this point it just becomes a test if you're a real long-term investor, you don't care about. The share swings, however, if you're faking it you're, probably feeling the heat right now. You know, i don't know what to tell you for me.

It's a long-term story, i'm not concerned at all. If you enjoyed this video - and you want to support this channel five bucks per month, you can join our patreon and the link is gon na be below and in the pinned comment. Thank you. So much in advance.

Happy fud, we'll see you tomorrow.