Palantir Stock- Another case with a billionaire witness makes its way to Chancery Court
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The Elon Musk Tesla case was not the only interesting trial in Delaware Chancery Court this month.
A shareholder dispute at data analysis company Palantir heard in Chancery last week involved another controversial billionaire, Peter Thiel.
Reuters reported a big issue is the company’s Class F stock.
Shares of the company have dropped by half since its public offering last year, a situation that often leads to cases making their way to the nation’s top business court.
The suit claims the stock structure leads to an “emperor for life” at the company and less accountability to shareholders.
Thiel is a founder of Denver-based Palantir and has been in the news for years. He was an early supporter of former President Donald Trump and a critic of Silicon Valley’s more liberal political outlook.
Thiel was recently in the news for making big contributions to GOP candidates in Ohio and Arizona in an effort to flip the Senate.
Thiel gained his fortune through moves that included co-founding payment giant PayPal and becoming an early investor in Facebook.
With a far more modest fortune than Musk and less of a desire to seek the spotlight, Thiel did not attract the TV trucks and fans that came with Elon’s appearance in Chancery.
There had been speculation that Palantir’s success in gaining government contracts might face barriers with the new administration.
However, the feds recently renewed a contract with Palantir that uses its technology in operating a distribution system for the Covid-19 vaccine.
At first blush, it appears that foes of Palantir’s stock structure face an uphill battle.
Ford, Comcast, and even Delaware water and sewer utility Artesian Resources all have stock that gives founding families control.
In his Chancery Court defense of allegations that he exercised undue influence in Tesla buying Solar City, Musk noted that Tesla does not have special stock categories. With a special class of stock, Musk might have experienced fewer problems with the Solar City deal.
The outcome of the Palantir case will be closely watched. While it’s unlikely, the court could make changes in the process of issuing special classes of stock.
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