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(Bloomberg) -- Palantir Technologies Inc. fell 5% from its opening trades in its debut as a public company, ending a 17-year tradition of secrecy surrounding the software business co-founded by Peter Thiel.
The data analytics company’s share price fell to $9.50 after opening Wednesday at $10 on the New York Stock Exchange. Palantir listed its shares directly on the exchange, rather than raising capital through an initial public offering. As in the three other major direct listings that have taken place, the exchange had set a reference price -- $7.25 for Palantir -- to help guide investors and to allow shares to begin trading.
Palantir ended the day with a market capitalization of about $15.7 billion based on its listed shares, according to data compiled by Bloomberg. On a fully diluted basis based on all the shares covered in its filings, the company has a value of almost $21 billion, in line with the $20 billion valuation private investors awarded it in 2015.
Going public was the right decision for Palantir, Chief Executive Officer and co-founder Alex Karp said in an interview, without commenting directly on the first day’s trading.
“We didn’t need to change our culture,” he said, referring among other things to Palantir’s tight group of insiders and their support for the programs run by U.S. government agencies. “I feel really good.”
Karp, Thiel and a tight-knit group of leaders will retain tight control of the company through a three-tiered share structure and voting rights. That’s needed to assure customers -- some of them controversial -- that they can trust the company, Karp said.
“It gives our clients enormous comfort that we will stand by them when times are good and when times are bad,” Karp said. “We support some of the most clandestine operations in the world.”
Companies are racing to go public in the U.S., where investors are welcoming new stocks ahead of a presidential election likely to drive volatility. Companies raised $61 billion from initial public offerings this quarter, the busiest on record, according to data compiled by Bloomberg. Software businesses were at the forefront of the listing boom. Snowflake Inc., the largest of them, raised $3.9 billion including so-called greenshoe shares in its IPO this month.
Asana Inc., a software company backed by Thiel’s venture capital firm Founders Fund, also went public Wednesday through a direct listing, an unconventional mechanism for taking a company public. Asana’s shares gained 6.7% from their opening price, giving the company a value of about $5.5 billion on a fully diluted basis.