Key Takeaways
- The 15-for-1 stock split for the GraniteShares 2x Long Palantir ETF (PTIR) is a mechanical adjustment reflecting the underlying stock’s significant appreciation, designed to lower the share price and improve accessibility.
- This event does not change the fundamental high-risk nature of the ETF, which remains a tool for short-term tactical trading due to daily leverage resets and volatility decay.
- The split occurs against a backdrop of a crucial shift in Palantir’s own narrative, having now achieved sustained GAAP profitability for several consecutive quarters, moving it beyond a purely speculative growth story.
- While Palantir’s valuation remains elevated, its progress in the commercial sector with its Artificial Intelligence Platform (AIP) provides the fundamental basis for bullish sentiment, which PTIR aims to amplify.
The decision by GraniteShares to implement a 15-for-1 forward stock split for its 2x Long Palantir ETF (PTIR) is, on the surface, a routine piece of market plumbing. Such moves are typically executed to make a security that has appreciated significantly more accessible by lowering its nominal per-share price. However, the event serves as a useful lens through which to examine the far more interesting dynamics at play: the remarkable evolution of the underlying asset, Palantir Technologies, and the enduring appetite for leveraged, high-conviction instruments in today’s market.
A Purely Mechanical Adjustment
It is essential to state plainly that a stock split is a cosmetic event. An investor holding one share of PTIR at, for example, £150 will simply hold 15 shares at £10 post-split. The total value of the holding is unchanged, as are the mechanics of the exchange-traded fund itself. The ETF will continue to seek twice the daily percentage change of Palantir’s common stock, and the considerable risks associated with that goal remain entirely intact.
The primary rationale is to reduce the psychological and practical barrier for participants wishing to trade in smaller capital amounts. While this may modestly improve liquidity and tighten bid-ask spreads over time, it does not alter the product’s fundamental purpose or risk profile. It is a tool for expressing a short-term, directional view, not a vehicle for long-term investment.
The Real Story: Palantir’s Maturation
The more compelling narrative is the one that necessitated the split: the performance of Palantir (PLTR) stock, which has been driven by a fundamental shift in its business. For years, the thesis for Palantir was rooted in speculative growth, government contracts, and the promise of future profitability. That narrative is now outdated. Palantir has reported seven consecutive quarters of GAAP profitability through the second quarter of 2024, a significant milestone that re-frames its investment case. [1] [2]
This profitability has been powered by aggressive expansion into the commercial sector, a strategic pivot from its traditional reliance on government clients. The company’s Artificial Intelligence Platform (AIP) has found considerable traction, fuelling substantial growth in its US commercial customer base and revenue.
| Metric | Q2 2024 | Q1 2024 | Q4 2023 |
|---|---|---|---|
| Total Revenue | $663 million (+23% YoY) | $634 million (+21% YoY) | $608 million (+20% YoY) |
| US Commercial Revenue Growth | +39% YoY | +40% YoY | +70% YoY |
| GAAP Net Income | $150 million | $106 million | $93 million |
Source: Palantir Technologies Inc. Quarterly Earnings Reports. [1] [2]
Of course, this success comes at a price. Palantir continues to trade at a premium valuation, with a forward price-to-earnings ratio that sits well above the software industry average. This valuation demands near-flawless execution and sustained high growth, making its stock inherently volatile and thus a prime candidate for leveraged products like PTIR.
The Unchanged Risks of Leverage
Investors drawn to PTIR by its newly lowered share price must understand that the split does nothing to mitigate the dangers of leveraged ETFs. The most significant of these is the effect of daily resetting, often called volatility decay or compounding risk. In a volatile or sideways market, these products can lose value even if the underlying asset finishes a period flat. For example, if Palantir’s stock falls 10% on day one and rises 11.1% on day two to return to its starting price, the 2x leveraged ETF would fall 20% on day one and rise 22.2% on day two. The result is a net loss for the ETF holder, while the stock investor is back at break-even.
These instruments are therefore designed for tactical use over very short time horizons, typically a single trading session, by those with a strong conviction about the stock’s immediate direction. They are not, and never have been, a proxy for owning Palantir stock over the long term.
Ultimately, the split of PTIR is a footnote in a larger story. It is a consequence of Palantir’s successful transition into a profitable enterprise with a compelling AI-driven growth engine. For traders, the ETF remains a high-octane tool for speculating on that story’s next chapter. As a final thought, the split’s success in attracting new volume may itself introduce a brief period of heightened volatility, not from the underlying asset, but from a fresh cohort of participants learning the sharp lessons of daily leverage in real time.
References
[1] Palantir Technologies Inc. (2024, August 5). Palantir Reports 23% Revenue Growth; US Commercial Revenue Grows 39% Year-over-Year in Q2 2024. Retrieved from https://investors.palantir.com/news-details/2024/Palantir-Reports-23-Revenue-Growth-US-Commercial-Revenue-Grows-39-Year-over-Year-in-Q2-2024/default.aspx
[2] Palantir Technologies Inc. (2024, May 6). Palantir Reports 21% Revenue Growth; US Commercial Revenue Grows 40% Year-over-Year in Q1 2024. Retrieved from https://investors.palantir.com/news-details/2024/Palantir-Reports-21-Revenue-Growth-US-Commercial-Revenue-Grows-40-Year-over-Year-in-Q1-2024/default.aspx
[3] GraniteShares. (2024). GraniteShares 2x Long PLTR Daily ETF (PTIR). Retrieved from https://graniteshares.com/institutional/us/en-us/etfs/ptir/
[4] Stock Analysis. (2024). GraniteShares 2x Long PLTR Daily ETF (PTIR). Retrieved from https://stockanalysis.com/etf/ptir/
[5] Yahoo Finance. (2024). GraniteShares 2x Long PLTR Daily ETF (PTIR) Quote. Retrieved from https://finance.yahoo.com/quote/PTIR/
[6] @StockMKTNewz. (2024, October 3). [Post regarding PTIR 15-for-1 stock split]. Retrieved from https://x.com/StockMKTNewz/status/1839507750583173518
