$PLTR Outlook
On November 30th, Peter Thiel recorded on a Form 4 a Conversion of 14,487,124 Class B Commons over to 14,487,124 Class A Commons. https://sec.report/Document/0001209191-20-061332/
Class B conversion to Class A, Peter Thiel p. 82: https://www.sec.gov/Archives/edgar/data/1321655/000119312520230013/d904406ds1.htm
In my own opinion this could be a bullish move for Thiel. This does not increase his equity in the company as some may lead you to believe. Thiel will keep the same equity interest within the company with the conversion from Class B to A granting him more voting rights, which in the end result could boost confidence of the company due to his commitment.
Let’s review:
- Class A shareholders usually have more voting rights than owners of other classes of stock. (Class A shares may offer 10 voting rights per stock held, while class B shares offer only one. It depends on how the company decides to structure its stock.)
- The difference is relevant only to shareholders who want an active role in the company.
- When more than one class of stock is offered, companies traditionally designate them as Class A and Class B.
- Retail investors are use to being sold Class C shares.
February 11th, 2021 is when $PLTR is expected to report earnings; Estimated EPS of .03. Their last Earnings Report they surprised by 125% (11/12/2020: Estimated EPS of .04 by .09).
February 20th, 2021 is the end of the lock-up terms per p. 79: https://www.sec.gov/Archives/edgar/data/1321655/000119312520230013/d904406ds1.htm
Employees with RSU will become vested will now be able to sell their shares; this could create some bearish activity by issuing their shares back out into the market which would create a downward trend in price with a “buy the dip” mentality (if you believe in the company long term).
Below is a $PLTR chart on the 65m timeframe¹ so that it is friendly and paying respect to Fibonacci. (I’ve gone over the reasons why for this as well before; I may include a separate post in the future in general about the timeframes to use with Fibs)
December 2nd, 2020; just before open, a candles wick hit the bottom Fibonacci at $21.15, which is when larger buy orders had been triggered as volume increased, therefore acting as a support. Since the time of writing this we have crossed the next Fibonacci Retracement of .236 at $22.86 as well.
- 1. If we had used a 60 minute chart, it presents a flaw, this would give us a trading session without equal intervals, since 390 minutes is not divisible by 60 minutes — when divided it gives you 6.5 intervals. This is why in our interval we ignore the first 30 minutes of trading in our charts — with the result of 65m timeframe being used.
Going further…
Yet again we see dark pool² proving to act as a support on the dips below during todays market hours.
..and here we go.
Here’s the secret sauce being revealed, buying commons, but hedging your position with a short position (PUT) for when the lock-up term and ER approaches.
A buyer bought 1329 PUT’s today worth $1.18M for the $27 strike price on the Ask.
On the flip side we did get alerted of a small bullish scalp play off of the downgrade news. These were profitable between 25–43%:
TLDR; I believe a dip is expected — but only for the best of the company’s future. If a dip does arrive, I will be hedged with PUT protection and will sell some of that protection during the dip in share price, with the end goal in mind to buy share near bottom.
- 2. Dark pools are private exchanges for trading securities that are not accessible by the investing public.
