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Palantir’s Plunge Drags Down Mega-Donor Peter Thiel’s Wealth

Bloomberg logoBloomberg 5/9/2022 Devon Pendleton and Lizette Chapman

(Bloomberg) -- The tech sector meltdown is chipping away at the fortune of Peter Thiel. 

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Palantir Technologies Inc., Thiel’s single-biggest equity position, plummeted as much as 23% Monday after it reported widening losses and tepid revenue growth. The slump erased about $270 million from the value of Thiel’s stake. So far this year he’s shed 19% of his net worth, now valued at $7.4 billion, according to the Bloomberg Billionaires Index. 

Read more: Palantir Craters Most Since 2020 on Wider-Than-Expected Loss  

Along with Alex Karp and others, Thiel co-founded the Denver-based software maker that specializes in data analytics and is known for its work supporting national defense and government entities. The company expects government revenue to increase this year against a backdrop of rising global conflict and risk. 

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On a conference call Monday with analysts, Chief Executive Officer Karp emphasized the threat of nuclear war. That didn’t do much to blunt a selloff. 

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“They have done a decent job of disappointing the investor base over and over,” said Michael Iavarone, an investment adviser at PHX Financial, which has sold a large portion of its Palantir position but still holds some shares. “Unless they come up with a catalyst, such as a buyback or major new contract, they will continue to get punished. Karp has made massive sales and is the most overpaid CEO in history based on what the stock has done.”

Karp, 54, was awarded a pay package last year valued at $264.2 million, including salary, stock and options grants, according to data compiled by Bloomberg. The value of Karp’s equity has sunk significantly due to the decline in markets. 

A Palantir spokesperson didn’t immediately respond to a request for comment.

For Thiel, 54, the drop in value of Palantir shares is cushioned by a significant cash position. Sales of former stakes, including PayPal Holdings Inc. and Meta Platform Inc.’s Facebook, as well as inflows from his venture capital group Founders Fund have helped him amass an estimated $4 billion in cash or other closely held assets.

Thanks to that pile, Thiel has become increasingly active in politics as a backer of candidates aligned with former President Donald Trump. Earlier this year, Thiel relocated to south Florida and stepped down from the board of Meta in order to focus on supporting candidates ahead of November’s midterm elections. He donated $10 million to the successful campaign of “Hillbilly Elegy”-author JD Vance in Ohio’s Republican primary race for Senate. 

Still, the majority of Thiel’s net worth is tied to tech companies, most notably through Founder’s Fund. The venture firm has backed startups including SpaceX, Lyft Inc., Spotify Technology SA and real estate company Compass Inc. The fund’s assets have swelled in recent years, alongside valuations, leaving it vulnerable if the tech rout persists and leads to an abrupt cooling in the number and scale of deals. 

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