Palantir now owns (ffie stock) 8.7% of struggling electric vehicle startup Faraday Future, according to a new filing with the U.S. Securities and Exchange Commission.
On October 2, the data-mining firm received over 800,000 shares in the EV startup “as payment for certain outstanding receivables”; based on Faraday Future’s (ffie stock) price at the time, that amounts to almost $2.4 million. Palantir doesn’t state clearly whose receivables were unpaid.
However, the EV firm stopped paying the data provider for services it had promised to purchase back in 2021, and the companies discreetly came into a settlement early this year.
Palantir disclosed the acquisition via a 13-G filing, which means it plans to handle the share in a passive manner. As a result, it is unlikely that Palantir would attempt to exert control over Faraday Future’s (ffie stock) little company at this time. Only around a dozen automobiles have been supplied by the EV startup, which is always in need of fresh capital.
Palantir’s shareholding, on the other hand, is a very odd consequence of the last few years, when a large number of EV businesses had tremendous growth before going bankrupt.
Several electric vehicle (EV) startups, including Faraday Future, capitalised on the then-current trend of special purpose acquisition companies (SPACs). It received a prize for going along with the crowd: When the startup combined with a SPAC and went public, it raised $1 billion.
Palantir contributed $25 million to the merger’s Private Investment in Public Equity (PIPE) section, which allows the firm going public to sell shares to other businesses hoping to ride along. Faraday Future agreed to employ Palantir’s data-mining services in return for a commercial contract.
(At the time, Palantir engaged in a number of these operations, including signing commercial contracts and participating in SPAC mergers.) In the end, Palantir sold those shares.
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In 2021, Faraday Future said that Palantir will benefit from its collaboration with the EV firm by “developing disruptive products and services.” However, the collaboration failed.
According to SEC filings, Palantir accused the EV firm of breaking the agreement in a letter it delivered to Faraday Future in April 2023. According to the data-mining firm, it owes $12.3 million.
Palantir submitted an arbitration demand in July 2023, arguing that the “amount in controversy” was really $41.5 million.
In March 2024, a settlement was struck between the two businesses. In August, when the firms revised the settlement, $4.8 million of the $5 million that Faraday was scheduled to pay was still unpaid. Then, between August and October, Faraday Future promised to pay Palantir $2.4 million in company shares.
Palantir didn’t immediately control a significant portion of the firm since Faraday Future (ffie stock) made that first payment in equity prior to its August 16 1-for-40 reverse stock split. However, the second payment was made after the split, giving it a roughly 9% ownership holding and much more shares.
A request for comment was not immediately answered by either business.
