TL;DR

Palantir’s $100 price target ignores red flags: stagnant government spending, insider selling, and an opaque business model. Retail investors risk becoming bagholders while insiders cash out.

Story

Another day, another speculative frenzy. This time, it’s Palantir ($PLTR), a data analytics company touted as the next big thing. Reddit threads buzz with “moon” talk and price targets exceeding $100, despite glaring red flags.

The hype hinges on Palantir’s government contracts, but defense budgets aren’t exploding—quite the opposite. Insiders are dumping shares, likely cashing out before reality bites.‣ Insider selling: When company executives sell large chunks of their stock, it often signals trouble ahead. This reeks of the dot-com bubble, where inflated valuations eventually crashed.

Remember Enron? Opaque accounting masked deep problems. Similarly, Palantir’s complex business model obscures its true value.‣ Opaque accounting: Financial statements so convoluted, they hide more than they reveal. Are they truly profitable, or just playing accounting games?

Blind faith in “disruptive tech” is a dangerous game. Remember the 2008 mortgage crisis? Complex derivatives were marketed as safe investments until the whole system imploded.‣ Derivatives: Financial instruments whose value is derived from another asset—often risky and hard to understand. Palantir’s narrative echoes this: “trust us, we’re different.” History tells us that “different” often means “disaster.”

Someone’s getting rich—and it’s not the retail investors clinging to the “moon” dream. More likely, it’s the insiders who unloaded their shares onto unsuspecting bagholders.‣ Bagholder: Someone left holding worthless investments after a crash.

The Reddit crowd’s defense? “The government will bail them out!” Ah, the moral hazard of the modern era.‣ Moral Hazard: When someone takes risks knowing they won’t bear the full consequences if things go wrong. This gamble rarely pays off. When the music stops, someone’s left holding the bag—and it’s usually not the ones calling the tune.

Advice

Don’t fall for hype. Scrutinize the fundamentals, not the narrative. Insider selling and opaque accounting are huge red flags. If it sounds too good to be true, it probably is.

Source

https://www.reddit.com/r/wallstreetbets/comments/1jkfptm/palantir_back_to_50_all_in_with_margin/