Palantir Technologies’ (PLTR) stock is down 15% on reports that chief executive officer (CEO) Alex Karp plans to sell $1.23 billion U.S. worth of share he owns in the data analytics company.
At the same time, there are media reports that the administration of U.S. President Donald Trump plans to cut the U.S. defence budget as much as 40% over the next five years.
Palantir is a major U.S. defense contractor and gets most of its revenue from governments around the world that use its data analytics technology.
Karp has adopted a Rule 10b5-1 trading plan with the U.S. Securities and Exchange Commission (SEC) to sell up to 9,975,000 Palantir shares through Sept. 12 of this year.
Based on the recent price of Palantir stock, Karp’s planned sale would net him $1.23 billion U.S.
In adopting the new 10b5-1 trading plan, Karp canceled a previous plan that would have seen him sell much more stock — 48.9 million shares worth about $6 billion U.S.
A 10b5-1 plan is used to remove the appearance of bias or that a company insider is benefitting from non-public information.
Karp’s planned stock sale comes as shares of Palantir enjoy a red-hot rally. So far this year, the stock has increased 50%, bringing its 12-month gain to 379%.
Palantir’s big run has been driven by strong financial results, the company’s artificial intelligence (A.I.) strategy, and retail investor enthusiasm for the stock.
Karp previously sold $1.95 billion U.S. worth of Palantir stock in 2024. However, much of last year’s stock sale was done for tax purposes.
Palantir’s share price has crushed the benchmark S&P 500 index that is up only about 4% so far this year.
However, investors apparently don’t like that Karp is selling his holdings of Palantir stock or that the U.S. is cutting its defence budget.
Palantir’s stock is currently trading at $108.12 U.S. per share, down from an all-time high of $125.41 U.S. reached in recent days.
