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Palantir Tried Buying Morgan Stanley's Stake in Value Feud

  • Bank’s mutual funds have repeatedly cut value of small holding
  • So Palantir sought to buy it back at lower price, people say
Morgan Stanley Headquarters Ahead Of Earnings Figures
Photographer: Bess Adler/Bloomberg
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Silicon Valley startups sometimes bicker with their investors, but tensions between Peter Thiel’s Palantir Technologies Inc. and Morgan Stanley’s mutual funds are reaching a breaking point.

The banks’ funds have cut their valuation of a minor stake in the secretive data-mining company several times in the last two years, estimating the company’s worth at just $4.4 billion as of September 30. That’s well below the appraisal of several other investors in the firm and just one-ninth the valuation Morgan Stanley’s own bankers predict the company could fetch in an initial public offering.