Palantir’s CEO just started selling stock again
He’s sold more than 20% of his stake over the last six months.
Palantir’s outspoken CEO Alex Karp has resumed selling the company’s stock following the approval of a new stock sale plan that would allow him to dispose of nearly 10 million more shares, worth roughly $860 million, once certain conditions are met. The new plan allows him to sell shares until September 12, 2025.
Jefferies analyst Brent Thill notes, in a report published March 4:
“We highlight a resumption of PLTR’s insider selling via Rule 10b5-1 trading plans in 2025 following increased insider selling activity in 2024, even as the stock has dropped precipitously over the last 2 weeks. CEO Alex Karp has sold shares worth another $45 million in the last 2 weeks after selling >$2 billion worth in 2024. While he has sold 21% of his overall stake in PLTR... Similarly, CTO Shyam Sankar has sold shares worth another $38 million in the last 2 weeks after selling >$380 million worth in 2024.”
Now, it’s a perilous thing trying to ascribe meaning to insider stock sales, as they can occur for a myriad of different reasons like tax and estate planning, investment diversification, divorce, yacht bills, blah, blah, blah. Here’s a look at Karp’s history of Palantir sales.
But the best advice I’ve ever seen on interpreting insider transactions comes from Fidelity investment GOAT Peter Lynch’s book, “One Up on Wall Street,” which is still a decent, if somewhat dated, read. He wrote:
“There are many reasons that officers might sell. They may need the money to pay their children’s tuition or to buy a new house or to satisfy a debt. They may have decided to diversify into other stocks. But there’s only one reason that insiders buy: They think the stock price is undervalued and will eventually go up.”
Now perhaps it’s not a fair comparison, as Karp and other Palantir executives are compensated largely through stock and thus don’t have a reason to buy shares.
But I can’t help but note that a search of insider transactions on FactSet produces zero records of Palantir insiders buying the stock on the open market at the prices where some regular stockholders are still getting in.
