Coinbase‘s trading debut drew in more than $57 million from retail investors, putting the cryptocurrency exchange among the most popular stocks to go public in the last four years, according to figures released Thursday.
Retail investors poured in $57.35 million into Coinbase on Wednesday when its direct listing on Nasdaq went live publicly, according to VandaTrack, which monitors retail investing activity in 9,000 individual stocks and ETFs in the US.
Coinbase accounted for nearly 7% of net purchases made by retail investors on Wednesday, with total purchases of US stocks and ETFs coming in at US$822 million.
Coinbase’s public debut was the fifth largest in terms of retail buying for newly listed shares since 2017, VandaTrack estimated. The largest was for Snap, with the social media company taking in $143 million in its first day of trading in March 2017. More recently, Rocket Companies, which runs personal finance and consumer service brands including Rocket Mortgage, logged $58 million from retail investors when it went public in August.
The collective profile of retail investors has been raised during the coronavirus pandemic in part as people have used stimulus money and time spent indoors during lockdowns working to make money from the stock market. A recent study by Charles Schwab released showed that 15% of all US stock markets investors began investing in 2020.
In the highly anticipated debut, Coinbase’s market value swelled to an intraday high of $112 billion, surpassing those of some of the largest companies in the US.
Coinbase shares during Thursday’s session rose, trading above $334 each. They finished Wednesday’s session at $328.28, below their open opening price of $381.
Thiel, the vocal libertarian who co-founded PayPal and Palantir and sits on the board of Facebook Facebook board member, also expressed concerns about technology theft and artificial intelligence, and called for greater restrictions on Chinese investment in the US and vice versa.
The event was called “The Nixon Seminar on Conservative Realism and National Security,” and the topic of discussion was “Big Tech and China: What do we need from Silicon Valley?”
Here are Thiel’s 17 best quotes from the seminar, lightly edited and condensed for clarity:
1. “Shockingly little innovation happens in China. But they have been very good at copying things, stealing things.”
2. “I criticized Google a few years ago for working with Chinese universities and Chinese researchers. And since everything in China is a civilian-military fusion, Google was effectively working with the Chinese military. One of the things that I was sort of told by some of the insiders at Google was they figured they might as well give the technology out the front door, because if they didn’t give it, it would get stolen anyway.”
3. “I had a set of conversations with some of the DeepMind AI people at Google. I asked them, ‘Is your AI being used to run the concentration camps in Xinjiang?’ and they said, ‘Well, we don’t know and don’t ask any questions.’ You have this almost magical thinking that by pretending everything is fine, that’s how you engage and have a conversation, and you make the world better.”
4. “If you look at the big five tech companies, Google, Facebook, Amazon, and Microsoft all have very, very little presence in China. So they aren’t a naturally pro-China constituency. Apple is probably the one that’s structurally a real problem, because the whole iPhone supply chain gets made from China.”
5. “We need to call companies like Google out for working on AI with communist China. I also think we should be putting a lot of pressure on Apple.”
6. “At Facebook, during the Hong Kong protests a year ago, the employees from Hong Kong were all in favor of the protests and free speech. But there were more employees at Facebook who were born in China than who were born in Hong Kong. And the Chinese nationals actually said that it was just Western arrogance, and they shouldn’t be taking Hong Kong’s side and things like that. The internal debate felt like people were actually more anti-Hong Kong than pro-Hong Kong.”
7. “TikTok is problematic because it has this incredible exfiltration of data about people. You are creating this incredibly privacy-invading map of a large part of the population of the Western world. It is a fairly powerful application of AI in a certain sense, as they find ways to make it especially addictive and figure out what videos to show you to keep you watching more and more. It doesn’t seem that if you shut it down, it would be an economic catastrophe.”
8. “In a totalitarian society, you have no qualms about getting data on everybody, in every way possible. That makes AI a very tricky technology, because there are a lot of ways we don’t actually want to apply it in the US or West.” – highlighting the Chinese government’s use of AI for widescale facial recognition.
9. “People often say crypto or bitcoin is a vaguely libertarian technology. If crypto is kind of libertarian, AI is kind of communist.”
10. “Even though I’m sort of a pro-crypto, pro-bitcoin maximalist person, I do wonder whether bitcoin should be partly thought of as a Chinese financial weapon against the US. It threatens fiat money, especially the US dollar, and China wants to do things to weaken the dollar. If China’s long bitcoin, perhaps the US should be asking some tougher questions about exactly how that works.”
11. “An internal stable coin in China – that’s not a real cryptocurrency. That’s just some sort of totalitarian measuring device.”
12. “Make it harder for Chinese investors to invest in the US, and perhaps we should also make it a little bit harder for American investors to invest in China. We have US investors that invest in China and become a big constituency for open capital flows. I think a decent part of the Wall Street crowd is pretty bad in this regard. I would dial it back on both sides – making it harder for US investors to invest in China is an almost equally important part of this.”
13. “China doesn’t like the US having the reserve currency, because it gives us a lot of leverage over Iranian oil supply chains and all sorts of things like that. You can think of the Euro in part as a Chinese weapon against the dollar. China would have liked to see two reserve currencies.”
14. “One of the very strange dynamics in Silicon Valley is people don’t do very much with semiconductors anymore. One of the weird problems with 20 years of intellectual property theft, and where IP doesn’t really have as much value as it used to, is that you learn not to invest in things like that.”
15. “People are too anchored to doing things that worked in the past or copying some model. Building a new search engine was the right thing for Google to do in 1999. It’s probably not the right thing to do today. It’s very hard to compete against Google by doing the exact same thing they are doing.”
16. “You can think of big tech as something that’s very natural. It’s maybe unnaturally big. It’s unhealthy. It’s too strong. But there’s something in the nature of tech to be big. Big science is actually an oxymoron. If you have some giant science factory, there’s probably not much science going on at all.” – criticizing how science has become overly institutionalized and dominated by large corporations.
17. “De-platforming President Trump was really quite extraordinary. That does feel like you really crossed some kind of Rubicon where you declare war on maybe a third, 40% of the country – that seems really crazy.”
A surprise quarterly loss in the company’s fourth-quarter earnings results released in mid-February didn’t help either.
And now tech stocks are selling off amid rising Treasury yields as investors rotate out of the highly valued tech sector to more cyclical value names in financials and energy.
Despite the negative news, some institutional investors are using the fall in share prices as a buying opportunity. Two of Cathie Wood’s ARK exchange-traded funds added over 2.6 million shares of Palantir on Wednesday.
The purchase followed a February addition of some 6.8 million shares of the big data firm for Wood’s ARK Innovation ETF and ARK Next Generation Internet ETF.
Palantir also continues to ink contracts with big names like 3M and IBM.
On Friday the company signed yet another deal, this time with Amazon Web Services to provide Enterprise Resource Planning (ERP) systems “that enables rapid integration and analysis of data” for customers.
Goldman analysts argued Palantir’s recent quarterly results showed signs of “sustainable growth” and issued a “buy” rating and $34 price target for the big data firm. The analysts noted the significant backlog of deals in their report, some of which we have seen go through over the last month.
Overall though, analysts have become increasingly bearish on Palantir, often citing its stretched valuation. The company holds three “buy” ratings, three “neutral” ratings, and five “sell” ratings from analysts.
At Wednesday’s closing price of $23.59, the shares were worth roughly $62.7 million.
The move made Palantir the 37th largest holding of the ARK Innovation ETF and the 20th largest holding of the ARK Next Generation Internet ETF.
Palantir’s stock has slumped in recent week, after a lockup expiration and a surprise quarterly loss led to considerable insider profit taking at the big data firm. Share prices have fallen over 26% in the past month and a recent tech stock pullback hasn’t helped.
The Invesco QQQ Trust Series 1 ETF, which tracks tech names in the Nasdaq, has fallen nearly 10% since the beginning of February. Much of the move down was caused by a bond sell-off that rocked markets last week, something Cathie Wood said she was “very comfortable” with given her funds’ long-term bias.
Wood has been using the recent tech rout to ‘buy the dip’ in many of her favorite names. The fund manager known as ‘money tree’ doubled down on her Tesla bet (1) (2) amid falling share prices at the EV maker, and now she’s taking another bite at Palantir.
Despite Palantir’s recent slide, a number of analysts still believe in the company’s prospects. Goldman Sachs analysts last month upgraded Palantir to a buy and placed a $34 price target on the firm after earnings.
Analysts, led by Christopher D. Merwin, CFA, argued Palantir now has a clear path to “sustainable growth” as the company continues to win contracts for their Foundry, Gotham, and Apollo software.
Palantir traded up 4.87% during premarket hours on Thursday.
Palantir stock sank as much as 13% on Tuesday after regulatory filings showed the company’s co-founder Stephen Cohen and two other top executives offloaded 2.7 million shares.
SEC filings revealed (1) (2) (3) the trio took advantage of Palantir’s recent lockup expiration selling shares in the $25-$30 price range on February 18, 19, and 22.
Stephen Cohen is a computer scientist who founded Palantir in 2003 with the help of Peter Thiel, Nathan Gettings, Joe Lonsdale, and Alex Karp. The sales by Cohen continue a trend at Palantir of insiders cashing out on the company’s historic run.
Palantir’s stock rose over 300% from $9.50 at the end of its first day of trading to over $39 per share on Jan 27. Since then, the company has retraced some of those gains, though insiders are still cashing in.
Just a month after Palantir went public last year, CEO Alex Karp and co-found Peter Thiel sold a combined 41.45 million shares, for more than $400 million.
Meanwhile, an SEC filing released on Friday showed Peter Thiel sold roughly 20 million shares of Palantir between $25-$26 per share after converting class B common stock into class A common stock.
Still, according to data from the Wall Street Journal, over the last six months there have been $136 million worth of awards and purchases of Palantir stock from insiders versus just $38 million in sales, while big-time investors keep adding shares as well.
Cathie Wood’s ARK Invest ETFs acquired roughly 6.8 million shares of Palantir last week as the stock pulled back.
The company also was recently given a fresh “buy” rating from analysts at Goldman Sachs who cited a path to “sustainable growth” as the reason they like the stock.
Palantir traded down 10% as of 9:52AM E.T. on Tuesday.
Palantir’s stock sank on Thursday after a lockup expiration freed some 80% of the company’s shares to trade on the open market. The stock was down as much as nearly 7% shortly after the opening bell.
Palantir had seen its share price more than triple since going public before a surprise earnings loss on Tuesday hurt momentum. Still, the company’s stock was up roughly 185% over the last six months prior to Thursday’s fall.
When the Denver-based firm went public via a direct listing back in September, early investors were forced to hold their shares due to a lockup clause. Now that the clause has expired, it means a number of big investors in Palantir could be looking to cash out amid the recent rally in the share price. If they do, it could drive the stock down significantly.
Citi analyst Tyler Radke warned about such an event back in January. The analyst downgraded Palantir to “sell” in a note to clients, claiming the Big Data company’s high valuation, decelerating growth, and lock-up expiration could lead to a sell-off.
Some big-time Palantir investors have already said they “will continue to sell shares as permitted.”
Soros Fund Management, which revealed in November it began investing in Palantir in 2012 and owned 18.46 million shares at one time, has said it will continue to divest from the Big Data firm.
“SFM does not approve of Palantir’s business practices,” the firm said in a statement last year. “SFM made this investment at a time when the negative social consequences of big data were less understood. SFM would not make an investment in Palantir today.”
Palantir still has a bevy of supporters, including numerous analysts. Goldman Sachs analysts more than doubled their price target to $34 per share for the Big Data firm after Tuesday’s earnings, citing a path to “sustainable growth.”
In an interview with CNBC on Wednesday, Wood said Palantir’s CEO Alex Karp was “speaking our language” in the quarterly conference call and that the company’s aggressive investments are the right path forward. Sacrificing near-term profitability for long-term growth is a net positive. according to Wood.
The CEO argued companies “have not been spending enough on innovation” and praised Palantir for its “refreshing attitude.”
“We don’t want profits now, we want them to invest aggressively,” Wood said.
Palantir stock traded at $25.93 as of 9:53AM E.T. on Thursday.
Palantir Technologies received a fresh “buy” rating and a $34 price target from Goldman Sachs on Wednesday.
While the big data analytics firm’s stock took a tumble on Tuesday after earnings revealed a surprise loss, analysts at Goldman were pleased with the quarterly results, saying the company now has a path to “sustainable growth”.
The analysts, led by Christopher D. Merwin, CFA, said Palantir posted “strong FQ4 results” that beat their revenue and EBITDA expectations by 6% and 115% respectively.
They also noted Palantir’s robust revenue guidance and backlog of orders going into 2021.
“We were encouraged to see management guide to $4bn of revenue in FY25, implying a 30% 5-year CAGR from FY20,” Merwin said. “With a growing backlog of $2.8bn in deal value (+31% y/y), we believe there is increasing visibility into the achievability of that long-term target.”
Government revenue was another bright spot for Palantir in its most recent earnings report, rising 85% year-over-year to $190 million. The company signed 21 deals worth over $5 million with contractors during the quarter compared to just 15 a year ago.
Goldman analysts also said they expect the margin expansion of 63 points seen in the quarter to continue going forward, leading the group to model 23% non-GAAP EBIT, up from 17%.
Furthermore, Goldman said Palantir’s deal with IBM to “should help to grow what is a relatively small commercial customer count today.”
Palantir’s quarterly results were enough for Goldman to more than double its price target from $13 per share to $34. The company should now “trade more in line with 30%+ growth businesses, which are trading at 44x CY21 sales” according to Merwin and his team.
Goldman’s price target implies a 22% potential return from Tuesday’s closing price.
Palantir’s stock has risen nearly 200% in the last six months amid a bull market for equities. However, the company saw its shares fall from all-time-highs of over $39 per share on Jan. 27.
Without PayPal, there may not have been Palantir. Or YouTube. Or SpaceX, LinkedIn, and Yelp.
The payments company – launched as Confinity in 1998 by Peter Thiel, Max Levchin, and Luke Nosek – grew to become a Silicon Valley giant. It was acquired by eBay in 2002 for $1.5 billion in a deal that altered Silicon Valley history and helped spawn the careers of some of tech’s most famous names.
Affirm was launched by Max Levchin, a PayPal cofounder.
When it was founded: 2013
What it does: Affirm offers instant lines of credit to customers shopping online, allowing them to buy a product and pay for it over time. The company raised a $500 million Series G round last month.
How it’s related to PayPal: Affirm is the brainchild of Max Levchin, one of the original PayPal founders. The company launched out of Levchin’s startup incubator, HVF — Levchin took over as CEO in 2014.
Levchin founded the company along with a team that includes Nathan Gettings, who also cofounded Palantir.
Fertility tracking company Glow was also born out of Levchin’s startup incubator.
When it was founded: 2013
What it does: Glow makes a family of apps that use data science to help track periods, ovulation, fertility, pregnancy, and children’s’ growth.
How it’s related to PayPal: Glow was also founded in Levchin’s HVF startup incubator, and Levchin now serves as executive chairman.
YouTube’s founders worked together at PayPal during the early days.
When it was founded: 2005
What it does: YouTube is a platform for hosting and sharing videos. It was sold to Google in November 2006.
How it’s related to PayPal: Founders Steve Chen, Chad Hurley, and Jawed Karim were all early employees at PayPal.
When PayPal sold to eBay for $1.5 billion, it sparked a “healthy competition” among the company’s alumni, early YouTube investor Roelof Botha told Business Insider earlier this year. When it came time for YouTube to sell, the team intentionally chose a price of $1.65 billion — 10% more than what eBay sold for.
Elon Musk founded SpaceX after working at PayPal.
When it was founded: 2002
What it does: The goal of SpaceX, short for Space Exploration Technologies, is to make space flight cheaper and eventually colonize Mars.
How it’s related to PayPal: In 1999, Musk launched an online banking company called X.com. That company merged with Thiel’s Confinity in 2000, then became PayPal in 2001. Musk was briefly PayPal CEO before being replaced by Thiel. But when PayPal sold, Musk netted $165 million from the deal, which he used to start SpaceX.
Musk was an early investor in and cofounder of Tesla.
When it was founded: 2003
What it does: Tesla manufactures electric vehicles, batteries, and solar panels.
How it’s related to PayPal: Musk was an early Tesla investor and cofounder. He became CEO in 2008.
Musk launched The Boring Company after becoming irritated by Los Angeles traffic.
When it was founded: 2016
What it does: The Boring Company builds underground tunnels with the intention of housing high-speed transit systems to reduce traffic in cities.