Conceptualized by English philosopher Jeremy Bentham, the panopticon actualized the common definition of integrity: doing the right thing even when no one’s watching.
Featuring a cylindrical design with a security post in the middle, Bentham’s structural design theoretically allowed for a single guard to monitor multiple incarcerated individuals within a penal institution. While it’s obviously impossible for any 1 person to monitor everybody at the same time, the idea was that at any moment, someone could be watching your actions. Therefore, the panopticon incentivized people to be on their best behavior.
As it turns out, Bentham may have been centuries ahead of his time. Today, panopticism — armed with the latest technologies — has evolved into what philosopher and psychologist Shoshanna Zuboff calls surveillance capitalism. While Bentham envisioned the economical imposition of institutional order, his concept eventually transitioned into a marketing machine.
Still, constant surveillance does not necessarily occupy the exclusive domain of the draconian and the cynical. Rather, as satellite-imaging-services provider Planet Labs Inc. demonstrates, having a bird’s-eye view of the target sector — in this case, Earth — can promote wondrous developments, ranging from agricultural efficiencies to energy infrastructure enhancements and yes, a more free and secure world.
Therefore, many investors will assess Planet Labs’ initial public offering (IPO). Here are the details you should be aware of before pressing forward.
When Is the Planet Labs IPO Date?
Among one of the most groundbreaking public market debuts of this year, Planet Labs will officially ink its name on the IPO calendar on Dec. 8. Shares will list on the New York Stock Exchange under the ticker symbol PL.
Unlike traditional IPOs, however, Planet Labs was technically available for trading since late April of this year. Rather than undergo the extensive vetting process normally associated with new public issues, the satellite-technology firm opted to merge with dMy Technology Group Inc IV (NYSE: DMYQ), a special purpose acquisition company (SPAC).
Although generating tremendous fanfare during the early months of this year, SPACs following the completion of their mergers have underperformed the benchmark S&P 500 index. Much of this is because of the inherently dilutive nature of these vehicles, which journalists also refer to as blank-check firms or shell companies.
As these labels suggest, a SPAC has no underlying operations. Instead, it initiates an IPO to raise funds to attract a merger deal with a viable privately held enterprise. Typically, a SPAC has 2 years to identify and close a deal, which puts its sponsors on the clock. A key risk factor is a misalignment of interests between sponsors and shareholders: the former just needs to secure a deal while the latter primarily aims for a profitable one.
During the process, Harvard Law School argues, “SPACs give shares, warrants and rights to parties that do not contribute cash to the eventual merger. Those essentially free securities dilute the value of shares that SPAC investors purchase.” Anytime you engage SPAC-based IPOs, you must always look out for yourself.
As The New York Times reported regarding the disappointing performance of electric vehicle firm Lordstown Motors (NASDAQ: RIDE), critics claimed that the SPAC that took Lordstown public basically committed an “astonishing due-diligence failure.”
But does the unraveling of prior blank-check firms impugn the future trajectory of PL stock? No and to be fair, SPACs do bring many positives, one of which being the facilitation of opportunities that retail investors ordinarily might not enjoy. As well, it’s vitally important to gauge each market opportunity — SPAC related or not — on its own merits.
Nevertheless, all IPOs carry multiple unknown variables, so conducting your own due diligence is a non-negotiable action item.
Planet Labs Financial History
Watch enough science-fiction films regarding space travel, and you’ll arrive at a consistent theme: the planet becomes no longer viable enough to sustain life and therefore humanity must start anew. Director and producer Christopher Nolan expertly brought this concept to life with his iconic film Interstellar.
Sure enough, even real-life events emphasize the theme of exiting established paradigms, most notably with visionary entrepreneur Elon Musk’s grand plan to colonize Mars. While the skyward trajectory remains the same, the end mission is what distinguishes Planet Labs from other space economy investments. Quite literally, PL stock is about looking down to raise people up.
Founded in 2010 on the mission to image Earth daily and facilitate accessible and actionable guidance across a wide swath of industries, Planet Labs presently commands over 700 customers. These companies comprise “the world’s leading agriculture, forestry, intelligence, education and finance companies and government agencies,” according to a corporate press release.
Given both the relevancy and the ability to generate consistent revenue through subscription services, PL stock presently stands as one of the more intriguing post-merger SPACs. In particular, the underlying company’s satellite images are becoming indispensable in catapulting agricultural efficiencies and management. According to the Global Center on Adaptation, satellite-imaging services enable farmers to map, measure and monitor their land, providing a clearer picture for mitigation efforts and effective resource distribution.
Similarly, energy firms can benefit from a view from above. Irrespective of whether the source of energy is renewable or otherwise, efficiency is the name of the game. While the future may be green, for now, as the Brookings Institution states, fossil fuels are incredibly difficult to quit, primarily because of their high energy density. Therefore, limiting environmental impact is a realistic goal, an area that suits Planet Labs.
As for the financial performance undergirding PL stock, investors must balance the satellite tech firm’s forward-looking strategies against current realities. For instance, on the revenue front, Planet Labs has respectable numbers, generating $113.2 million in the year ending Jan. 31, 2021. Despite the headwinds of the COVID-19 pandemic, Planet still managed to grow top-line sales by over 18% on a year-over-year basis.
However, net losses in the year ending January 2021 amounted to $127.1 million, widening from a loss of $123.7 million in the year-ago period. Eventually, stakeholders will want to see profitability, which could be a challenge.
Planet Labs Potential
Because of the high redemption rate of SPACs this year, many shell companies tend to print red ink following their merger announcement. But PL stock is, at time of writing, trading above its initial offering price of $10. This circumstance may indicate that Planet Labs could move against the SPAC grain.
Fascinatingly, The New York Times used Planet’s imaging services to track the creatively illicit means North Korea deploys to acquire oil. Not only does this action represent profound journalism, it also has significant implications for the U.S. national security and foreign policy profile.
Nevertheless, investors should realize that the satellite-imaging market could get very competitive. As it stands, the total sector is worth $2.63 billion. By 2030, the market size could expand to almost $7 billion. While a sizable tally, investors will want to ensure that they’re not overpaying for PL stock relative to the underlying company’s total addressable market.
As well, SPACs can look amazing in the early sessions but fade out later, especially if longtime shareholders exercise their warrants. Therefore, vigilance is always your ally.
How to Buy Planet Labs IPO (PL) Stock
With the business combination complete, prospective investors must acquire PL shares at the open, an easy proposition if you know how to buy stocks. If not, just follow the steps below.
Step 1: Pick a brokerage.
Any reputable brokerage will allow you to acquire PL stock. Therefore, you should narrow your list of best brokers to those that feature interfaces that align with your comfort level.
Step 2: Decide how many shares you want.
IPOs are inherently risky, and SPACs are doubly so. To help mitigate possible downside, choose a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
PL Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
While you can’t acquire PL shares at their pre-IPO (initial offering) price, those who want to build their IPO acumen should consider opening an account with Freedom Finance, which distributes select new issues at their offering price.
A Not So Lonely Planet
By having eyes in the sky, modern enterprises enjoy a groundbreaking solution that early human civilizations could only dream about. Further, the expansive relevancy of Planet Labs’ services could bolster PL stock. However, you should be cautious about the challenging nature of SPAC-based IPOs.