Palantir’s Plunge: A Tale of Valuation and Velvet Gloves

by

Dear reader, one might have thought Palantir (PLTR) had accidentally stepped into a puddle of its own overhyped algorithms this morning, what with its shares pirouetting downward to the tune of 6.9% by 11:02 a.m. ET. A performance that put the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to shame, as they slumped a mere 0.2% and 1% respectively-like debutantes tripping over their own skirts after a particularly spirited quadrille.

Loading widget...

Citron’s Curious Case of Valuation Whiplash

Citron Research, that sprightly band of financial merrymakers known for their talent in spotting balloons in need of pricking, has declared Palantir’s valuation about as rational as a hedgehog in a balloon factory. Their evidence? The recent $500 billion valuation of OpenAI, a company currently burning cash like a Victorian gentleman burning through his inheritance at Monte Carlo. At 17x price-to-sales, Citron argues, OpenAI’s multiple is already “extreme”-and if applied to Palantir, would leave its shares trading at a paltry $40. A drop from $162 to $40, one might say, is rather like discovering your silk waistcoat has been mistaken for a dishcloth.

A Gentleman’s Wager on Reality

Now, while one must always regard short sellers’ pronouncements with the same skepticism reserved for a traveling salesman offering “guaranteed” perpetual motion machines, there’s a whiff of truth here that tickles the nostrils. Palantir’s current P/S ratio, if compared to OpenAI’s hypothetical public valuation, makes its stock look about as affordable as a private island in the Caymans. Admittedly, Palantir does possess the minor virtue of profitability-a quality OpenAI currently lacks, unless one counts burning through cash at “breathtaking” speed as a skill.

Still, for Palantir to justify this valuation, it would need to grow at a pace that would make a dandelion blush. And while I do enjoy a good underdog story as much as the next chap, expecting such breakneck expansion decade after decade feels about as realistic as hoping your Aunt Agatha will suddenly develop a sense of humor. 🤷♂️

Read More

2025-08-19 19:30