Palantir Technologies (PLTR) saw its stock drop sharply on Wednesday, falling 10% to close at $112.06, after CEO Alex Karp revealed plans to sell over $1 billion worth of his shares. The stock continued its downward trend, dropping an additional 4% in extended trading.
Karp’s new trading plan, disclosed in a Tuesday filing with the Securities and Exchange Commission, outlines the potential sale of up to 48.9 million shares, which could be worth as much as $1.23 billion, according to Barron’s. The announcement sparked investor concerns, contributing to the stock’s sharp decline.
In addition to the CEO’s share sale, Palantir faced another headwind from the Pentagon. Defense Secretary Pete Hegseth has reportedly asked senior military officials to develop a plan to reduce the defense budget over the next five years, as reported by The Washington Post. Given Palantir’s significant reliance on government and defense contracts, the news of potential defense cuts added to investor unease.
The drop in Palantir stock ended a four-day winning streak and highlighted the company’s vulnerability to fluctuations in government and defense spending. Despite the setback, Palantir’s stock still maintains a near-perfect Relative Strength Rating of 99 and has surged more than 45% year-to-date.
