Shares of Palantir Technologies Inc (NYSE:PLTR) were down 12.2% in Thursday morning trading, extending losses after a Wednedsay evening report suggested potential US defense budget cuts and disclosures that CEO Alex Karp is set to sell nearly 10 million shares.
The Washington Post reported that US defense spending could decline by 8% annually over the next five years, raising concerns about Palantir’s revenue prospects. The data analytics company provides software to US government agencies, including the Pentagon.
Investor confidence was further shaken by regulatory filings showing that Karp has been granted approval to sell a significant number of shares over the next six months. While executive stock sales do not always indicate trouble, such moves are often scrutinized as potential warning signs.
Palantir’s stock recently peaked at around $125.
The company had a market valuation of around $28 billion before the after-hours decline.