Tech

Palantir insiders struggled to sell shares at debut because they couldn't access trading platform

Key Points
  • Employees and alumni of Palantir were having trouble getting into the Shareworks platform that Morgan Stanley provides for share sales as Palantir debuted on the NYSE.
  • The stock opened at $10 in the company's direct listing and traded as high as $11.42 before closing at $9.50.
  • One of the benefits of debuting with a direct listing instead of a traditional IPO is that existing investors can sell some shares rather than waiting for a typical 180-day lockup to expire.
People walk by a banner featuring the logo of Palantir Technologies (PLTR) at the New York Stock Exchange (NYSE) on the day of their initial public offering (IPO) in Manhattan, New York City, U.S., September 30, 2020.
Andrew Kelly | Reutersa

Palantir employees and alumni complained on Wednesday of being unable to sell shares after the company's direct listing because they couldn't transact on a platform provided by Morgan Stanley.

Palantir shares opened at $10 on the New York Stock Exchange. Existing investors are allowed to sell up to 20% of their shares before the lockup expires. But several former workers, who asked not to be named because they weren't authorized to speak to the public, told CNBC that they and some current employees couldn't get into Morgan Stanley's Shareworks system.

The stock traded as high as $11.42 before closing at $9.50. Current and former employees were texting with each other about the problem and complaining of their inability to sell. One former employee followed up with CNBC to say the system finally started working late in the morning, Pacific Time. 

Palantir, which makes data analysis software for government agencies and big corporations, debuted on the New York Stock Exchange with a direct listing instead of a traditional IPO. One of the benefits is that existing investors can sell some shares rather than waiting for a typical 180-day lockup to expire.

Palantir didn't respond to a request for comment. After publication of the story, a spokesperson for Morgan Stanley's Shareworks group sent the following statement:

"We experienced slowness that may have resulted in delayed logins into our system. At all times our call centers were available to execute trades. We will work through any issue that is brought to our attention and ensure that no employee will be disadvantaged."

— CNBC's Leslie Picker contributed to this report.

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