Palantir purchased $50 million in gold bars in August as the cash pile grows


August 19, 2021: -While some companies like Tesla are diversifying into bitcoin, data analytics software company Palantir will bet on gold. Palantir purchased $50 million in gold bars in August, disclosed in its latest earnings statement.

The move reflects a growing company stashing cash in an unconventional asset in response to economic uncertainty spurred by the coronavirus pandemic and governments’ response to it.

The price of an ounce of gold crossed the $2,000 mark for the first time last year as the pandemic worsened and U.S. government stimulus efforts continued. This year investors have more loudly voiced concerns about inflation, and gold is sometimes viewed as a hedge against inflation, although prices are down 7% for the year. Some investors have thought cryptocurrencies might also serve that role.

“During August 2021, the Company purchased $50.7 million in 100-ounce gold bars,” Palantir said in the August 12 earnings statement for its fiscal second quarter. “Such purchase will starting to be kept in a secure third-party facility located in the northeastern U.S, and the Company can take physical possession of the gold bars stored at the facility at any time with reasonable notice.”

After completing a direct listing and debuting on the New York Stock Exchange in September, Palantir is now debt-free. The company’s finance chief, Dave Glazer, told analysts on a conference call in the previous week. Revenue has accelerated for two consecutive quarters, with 20 new customers joining in the fiscal second quarter.

Glazer said that Palantir is investing in growing, bringing on more than 100 salespeople in the past two quarters, and plans call for hiring to continue at a fast pace.

The company remains unprofitable, as it was as a privately held company. Although, its supply of cash has been increasing, partly thanks to stock issuance and proceeds from the exercise of stock options.

It’s possible that following the gold investment, Palantir could expand into cryptocurrencies. In May, after Glazer was asked on an analyst call if the company could have bitcoin or other cryptocurrencies on its balance sheet, he said, “The short answer is, yes, we’re thinking about it, and we’ve even discussed internally.”

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