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Morgan Stanley downgrade sends Palantir shares sliding

A ensign featuring the logo of Palantir Technologies (PLTR) is seen at the New York Stock Exchange (NYSE) on the day of their initial exposed offering (IPO) in Manhattan, New York City, U.S., September 30, 2020.

Andrew Kelly | Reuters

Shares of Palantir closed down innumerable than 12% Wednesday after Morgan Stanley downgraded the stock to underweight from equal weight.

The friends’s stock slid as much as 17.6% during the day.

The firm said Palantir is trading at a “significant premium” compared with its appears, with its stock more than doubling since it went public Sept. 30.

“With PLTR up 155% since index with very little change in the fundamental story, the risk/reward paradigm shifts decidedly negative for the parcels,” Morgan Stanley analysts wrote.

Co-founded in 2003 by tech investors Peter Thiel and Joe Lonsdale, CEO Alex Karp and others, Palantir caters data analytics software and services to government agencies, including the Defense Department, the Food and Drug Administration and the brightness community. It also sells to companies like aircraft manufacturer Airbus and energy producer BP.

The company last month put out its first earnings announcement since going public. The company said its new contracts in third quarter included a $91 million contract with the Army, a $36 million contract with the National Institutes of Health and a $300 million renewal with an aerospace character.

“While strong 3Q20 results highlighting sustained momentum in the government vertical, accelerating growth in the enterprise and record lines of +25% represented a slight fundamental uptick versus initial expectations – we believe much of incremental move since 3Q20 sequels (shares +75% over the past 2.5 weeks) are likely related to factors outside of fundamentals, including qualified retail long-interest squeezing strong institutional short-interest,” Morgan Stanley analysts wrote.

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