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Obviously, I don't know what's going on at Palantir besides what I've read, but I know a few things about Finance. A tax loss isn't necessarily all bad news. If you have a tax loss in one year, you might be able to use that loss to offset profits in future years, to minimize taxes for your business in those years. This technique is called a tax loss carry forward because it takes a tax loss in one year and carries it into a future year. So, what they might be doing is using this as an opportunity to "throw the baby out with the bathwater," as the saying goes. Show a bunch of losses prior to IPO (setting expectations low), then show gradually improving operating results. Investors love this kind of "story" because the potential for stock to go down is less then if they were to show a booming business right off the bat. Finally, just to make a point about investors not necessarily being worried about a company showing losses, all you have to do is look at Amazon, who for years showed loses. |
But as an Investor, it concerns me they spent $900M on Sales and Marketing in the Gov sector over 2 years.
That is essentially a lobby-dependent business model with long-term success contingent on the currently elected administration.