After 17 years, Palantir is getting closer and closer to his public debut later this month. We’ve covered various aspects of the company’s direct listing process, including concerns about its governance and how insiders are accelerating the sale of their stocks as the public market date approaches.
We now have some major updates on the company, thanks to a third amended filing of the company’s S-1 with the SEC this afternoon.
The first news is that Palantir finally has a chief accountant. Jeffrey Buckley, who was formerly chief accounting officer at gaming giant Zynga, will join the company later this week in an equivalent role managing the company̵
Concerns about Palantir’s audit quality have increased since the company’s Board of Directors recently set up the governance committee required to manage the company’s records. As we noted a few weeks ago, Palantir admitted in its most recent SEC filings that it would not have an independent board of directors audit committee long after it went public.
When it comes to insiders and their buying and selling intentions, it becomes clear that more and more of them are heading for the exit. When filing this afternoon, Gründerfonds increased its target number of shares for registration by around 8%, or around 2 million shares in the company.
In addition, the company has clarified some components of its unique governance.
First the three founders of the company, Alex Karp, Stephen Cohen and Peter Thiel are not allowed to hedge their shares in the company due to their active employment with Palantir. Buried in a section on the voting rights of the company’s founders, Palantir added a sentence: “… but the company has implemented a policy restricting or prohibiting the protection of directors, officers and employees of the company …” That policy existed before . However, the company’s recent filing makes it clear that the policy also applies to the founders. If either of the three left, however, they could theoretically secure their position, unless a contract is signed when they leave.
Second, Palantir has a tripartite, intricate governance structure that includes a special “Class F” component that enables the founders Karp, Cohen and Thiel to have an almost one-sided control over the company’s voting rights over the long term. Such an agreement is unique – most technology companies going public today have two classes of shares, one class with one vote per share and one class with ten votes per share. Palantir’s Class F Shares have a variable number of votes that always give the three founders 49.999999% of voting rights in the company.
In its amended filing this afternoon, Palantir clarified that some of the Thiel shares are considered “Excluded Founders Designated Shares,” which are not class F shares. This allows Thiel to vote these shares separately, which increases his general voting rights in Palantir.
Minutia maybe, but crucial to a company that has been so in the spotlight for the past decade and is a constant lightning rod for commenting on the comment. The NYSE has approved Palantir’s prospectus, which means that further changes to their documents outside of pricing are unlikely to be imminent. The company is still expected to begin its direct listing around September 23rd.