Weekly Market Summary
Week ended October 2, 2020
Palantir Goes Public via Direct Listing
On Wednesday, September 30th, Palantir made its Wall Street debut on the New York Stock Exchange where shares closed at $9.50 with a valuation of $21 billion. Palantir went public using a ‘direct listing’, removing the bank from the IPO process and saving the firm millions in fees.
Who is Palantir? The company builds software that helps governments collect and analyze data. Their clients include the RCMP, CIA, CSIS, and local police departments who use the slick platform to conduct intelligence operations. But Palantir is controversial. Critics argue that the company builds unethical spy software used to harass minority communities and infringe upon our civil liberties. And they make a good point. It has been reported that ICE (US Immigration and Customs Enforcement) uses Palantir’s software to conduct raids on undocumented families.
Summary effect on SMEs: Palantir wasn’t the only company to do a direct listing this week. Asana, the project management platform, also went public via a direct listing and closed at a $5.5 billion valuation. Both companies exceeded expectations so don’t be surprised if more firms consider going public. For SME, IPO’s are a chance for growth through raising capital, and with the IPO market is especially hot in recent months, it could be a path worth considering.
COVID Update in Canada
In the midst of a surge in new cases, Health Canada approved a new rapid test for COVID-19. The Abbott Diagnostics ID Now test uses the same nasal swab as existing tests but can be processed on-site and get results in as little as 13 minutes. There is no news on when they will arrive but the Government of Canada has purchased 7.9 million testing swabs and 3,800 of the analysis machines.
As Canada enters a second wave of COVID-19, testing facilities across the country are overwhelmed. Ontario, in particular, is struggling to process tests fast enough due to lack of lab capacity. Therefore, public health authorities can use rapid testing to quickly quarantine positive individuals and reduce the spread, In addition, in-facility testing increases overall testing capacity and reduces wait times for patients.
Summary effect on SMEs: In many ways, COVID has affected SMEs in different industries … and the only way for things to return to normal is dependent on a vaccine. But we can’t expect a vaccine to arrive until early 2021, therefore COVID testing is one of the ways countries can control the spread. For SMEs, it is important to consider the positives of working from home for employees all while mitigating the business and financial risks associated with COVID.