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  1. Home
  2. / Investing
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My Crystal Ball Sees Palantir's Opening as Shaking Up This Stock

We'll witness some action in Suro Capital, which has an ownership stake dating back to when Palantir was private.
By TIMOTHY COLLINS
Sep 29, 2020 | 02:51 PM EDT
Stocks quotes in this article: SSSS, SNOW, FROG, UPWK

I'm not a huge fan of anticipation, but with Palantir (PLTR) opening Wednesday, I expect we'll see some action in Suro Capital ( SSSS) , which has an ownership stake dating back to when Palantir was private. Quick note for dividend chasers: The company will be paying a $0.25 dividend on Oct. 2. Based on the June 30 10-Q, we can see that Palantir's common shares were nearly 16% of the portfolio, plus an additional 3.6% in a Palantir SPV. This SPV is a collateralized loan, receiving 15% interest and a percentage of share price appreciation in the underlying collateral.
 
 
Overall, it's not a bad proxy for Palantir and SSSS' largest holding, Coursera, is an attractive online education play, there's a lot to like here. The next largest play, Course Hero, is also online education, so post-Palantir, SuRo remains a strong proxy for private online education companies. The company ended the June 30 quarter with a net asset value of $11.84 per share. While we're trading a dollar above that, I don't think the current value is likely much under that, given the strength in the online education sector.
 
The October $15 options are trading the most aggressively at the moment, while the October $12.50 calls offer an attractive covered scenario, as well. I anticipate an initial push followed by some cooling, although it will all depend on how the market reacts to Palantir. If we get anything sniffing Snowflake's ( SNOW) first day or even JFrog ( FROG) , then SuRo should be a huge benefactor. I have a hard time seeing that kind of reaction, but I do think we'll see initial buying on Palantir.
 
 
One other stock I'd watch on a breakout here is Upwork ( UPWK) . I've written about this one previously. If the uptick in Covid-19 cases continues, this weekly chart is setup for a breakout higher. We have the huge V-shaped bounce that has already played out, followed by several months of consolidation in the $13.50 to $16.75 range. With Tuesday's push to $17, UPWK is setting for a potential push to $20 before Thanksgiving. Both trend and momentum, as seen in the Moving Average Convergence Divergence and Full Stochastics, have pushed higher, so this has a solid look to it. If the stock closed under $15.25, I would step aside and wait for a drop of another dollar before considering getting back on the long side, if doing anything at all.
 
 
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At the time of publication, Timothy Collins was long SSSS, UPWK.
 
TAGS: IPOs | Investing | Options | Stocks | Technology

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