Palantir (NYSE:PLTR) recently acquired about 6 million more shares of Rubicon Technologies (NYSE:RBT), bringing its stake in the firm to 6.2%. Palantir’s purchase of the shares appears to have been required by a deal that the company signed with Rubicon last year. As of this writing, PLTR stock is up by about 5%.
Palantir creates and markets data analysis tools. Meanwhile, Rubicon operates “a digital marketplace for waste and recycling service.” Rubicon is also one of Palantir’s customers.
PLTR Stock and the Investment in Rubicon
After Palantir acquired another 5.69 million shares of RBT stock since March 31, PLTR owns a total of 14.63 million shares of the company. That brings its total stake in Rubicon to 6.2%.
In May, Palantir noted in a U.S. Securities and Exchange Commission (SEC) filing that its stake in Rubicon had dropped below 10% because the start-up had sold more shares.
According to Barron’s, Palantir “enhances Rubicon’s data analytics capabilities.” Additionally, as part of the partnership, the company helps Rubicon bring a number of its offerings to market.
Shares of RBT stock became publicly traded last year after the company combined with a special purpose acquisition company (SPAC).
Criticism of Palantir’s SPAC Investments
Rubicon is one of Palantir’s customers. In the last few years, some critics have said that Palantir’s practice of investing in firms that subsequently become customers is negative for PLTR stock. Some on the Street believe that Palantir is “buying revenue” with such deals.
Last December, The Wall Street Journal reported that these large-scale investments by Palantir were “unusual.” Noting that PLTR had invested more than $400 million in this way, WSJ also noted that “the bets have backfired.”
Per the report:
“Palantir’s 20 startup investments, which include a flying-taxi company and numerous electric-vehicle startups, are down more than 80% on average.”
How these kinds of investments play into the future of Palantir remains to be seen.
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On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
