Photographer: Michael Short/Bloomberg

Oracle Weighed Buying Palantir in 2016, Investor Tells Court

  • Palantir’s Thiel, Oracle’s Ellison met to discuss acquisition
  • Investor also says Goldman pitched $30 billion offering

Oracle Corp. discussed buying data-analytics company Palantir Technologies Inc. last year, a disgruntled investor in the secretive startup said in court Wednesday.

Palantir Chairman Peter Thiel talked with Oracle founder Larry Ellison about having the software maker acquire the data miner, Palantir investor Marc Abramowitz said at a hearing over allegations that Palantir thwarted his efforts to sell part of his stake in the company. Abramowitz is suing the company to gain access to internal records about the Oracle talks and other corporate moves.

Abramowitz testified that he and ex-Walt Disney Co. executive Michael Ovitz set up the lunch aimed at brokering a buyout deal. Ovitz also is an investor in the startup, which investors valued at $20 billion in 2015. ‘‘The idea was to make an introduction to see if Oracle would pursue an acquisition,’’ Abramowitz told a Delaware judge. Oracle declined to comment. Palantir didn’t immediately have a comment about acquisition talks.

The Palantir investor also said a company official tipped him off that Goldman Sachs Group Inc. pitched Palantir on a $30 billion initial public offering in 2015. Palantir Chief Executive Officer Alex Karp said in May the firm is positioned to go public.

Abramowitz is putting pressure on Palantir as it weighs whether to launch an IPO. The majority of revenue for the Palo Alto, California-based startup, which was founded in 2004, came from government contracts until 2016 when deals with banks, consumer-goods companies and other commercial clients reached the same level, Karp told Bloomberg in January.

Selling Stake

Abramowitz’s KT4 Partners sued Palantir in Delaware Chancery Court for records that it said it needs to determine whether Thiel’s company wrongfully blocked it from selling some of its $60 million stake in the startup to a Chinese private-equity firm. The Palantir investor said Wednesday he wants access to the records to provide ammunition for a suit over the blocked share sale.

Abramowitz’s battle is the latest example of a startup investor frustrated with the uneven disclosure laws governing private companies. Typically, the more shares an investor owns the more information the startup provides that investor. While the practice is intended to maintain secrecy -- a major advantage of remaining private -- a common biproduct is that small early stage investors are often left in the dark. 

When those shares skyrocket in value, as Palantir’s have, and early investors are working with incomplete information, tensions rise and investors sue as they have at Stiefel Laboratories Inc., OrderUp Inc., Mu Sigma and now Palantir.

Abramowitz also is questioning whether Karp is reaping excessive compensation and whether Palantir assets are being wasted on things such as private security for the CEO. He noted that internal documents showed Karp held 6 million Palantir shares in 2008. The files show those holdings jumped the following year to more than 60 million shares, he added.

“That’s something that needs to be examined,” the investor said.

Kevin Orsini, a lawyer representing Palantir, noted that Karp’s holdings rose after Palantir launched a 10-for-one stock split in 2009. “So that’s a logical explanation for the rise, isn’t it?” the lawyer asked. Abramowitz agreed.

Palantir officials accuse Abramowitz of suing over the corporate records after the data miner sued the investor in state court in California for allegedly stealing trade secrets and falsely filing five patents in his name for Palantir’s inventions. Abramowitz said Wednesday he’d offered to drop the Delaware case if Palantir officials dismissed the California suit.

Chancery Judge Joseph Slights in Dover, Delaware, will decide later whether Abramowitz provided a “proper purpose” for his records request.

The Delaware case is KT4 Partners LLC v. Palantir Technologies Inc., 2017-0177, Delaware Court of Chancery. The California case is Palantir Technologies Inc. V. Abramowitz, 16CV299476, California Superior Court, Santa Clara County (San Jose).

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