Apr. 15 at 11:06 PM
$PLTR A headwind little discussed by investors
What can sneak up on a stock like Palantir, is the headwind of stock-based compensation. It's a silent, non-cash killer of shareholder returns.
Without going into complicated shareholder dilution math, we can look at Palantir's shares outstanding growth over the last five years: 28%. If this level of dilution continues, Palantir's current market cap of
$316 billion will grow to
$404 billion over the next five years, if the stock price stays exactly where it is today. That is close to
$100 billion (almost 25x the company's 2025 revenue) from just shareholder dilution.
Unless the company radically changes its employee compensation plan, Palantir stock is likely to face shareholder dilution headwinds for any investor planning to hold for the long haul.
