Anthropic reportedly considering raising its IPO issue price, with a target valuation potentially reaching $1.5 trillion

Main body of the article

According to media reports, just one day after disclosing its listing next week and announcing IPO pricing details, Anthropic's underwriters are already considering raising the offering price of its IPO amid strong investor demand.

According to multiple people familiar with the matter, the underwriters have signaled that they expect to raise Anthropic's offering price above the $70-78 range disclosed in Tuesday's prospectus filing. The move is expected to push its fully diluted target valuation to $1.5 trillion or even higher within the next few days.

Raising the offering price is also expected to push the total amount raised in the IPO past the $100 billion mark. Three of Anthropic's early investors said the company's current focus is on raising as much money as possible through the listing to support its massive spending on computing infrastructure, rather than single-mindedly pursuing the maximization of its paper valuation.

People familiar with the matter said the underwriting team led by Goldman Sachs and Morgan Stanley has received strong investor interest since launching the roadshow on Tuesday and is expected to push up the final offering price accordingly.

The documents Anthropic made public on Tuesday show that the company plans to issue and sell a total of 825 million shares at $70-78 per share, raising up to about $64.35 billion in the IPO. If oversubscribed, it could raise nearly $10 billion more through the "greenshoe" mechanism (over-allotment option).

The company also announced that as part of the transaction, it will conduct a private placement in which Anthropic strategic partners including Google, Nvidia and Microsoft will invest a total of $26 billion in the company at the IPO price.

Based on the upper end of the offering range of $78 per share announced on Tuesday, Anthropic's market value calculated on the basis of actual outstanding shares after the completion of the IPO and the private placement would be about $1.02 trillion. But if stock options, restricted stock units and other potential shares are included, its fully diluted valuation would be up to about $1.4 trillion.

Was the market previously too pessimistic?

Anthropic launched its investor roadshow on Tuesday. The company expects to set the final IPO offering price on November 18 and begin trading on the Nasdaq Global Select Market on November 19. Anthropic's listing comes at a highly sensitive time for financial markets—just days earlier, the U.S. midterm elections triggered a sharp selloff in tech stocks, wiping out as much as $3.2 trillion in market value in a single day and leaving Wall Street on edge.

Although the market subsequently stabilized and rebounded somewhat, the sharp swing highlighted how quickly market sentiment can reverse, and high leverage has multiplied the swings in profit and loss for many investment institutions. "In the current market environment, getting through a weekend feels like a lifetime," one executive at a large investment institution lamented.

In recent weeks, as doubts deepened over whether the AI boom can last, Anthropic's investors also modestly lowered their earlier expectations of an IPO valuation of $2 trillion. But as Anthropic on Tuesday disclosed an IPO pricing range that may be more subdued than market expectations, some bullish sentiment instead began to emerge.

The company has recently been trying to allay concerns about whether its revenue can keep pace with plans to spend about $900 billion on computing power and infrastructure over the next few years. Anthropic told investors that its annualized revenue reached $81 billion in October and that third-quarter revenue was $17 billion.

According to people familiar with the matter, Anthropic's main rival OpenAI also told investors on Tuesday that its third-quarter revenue jumped 50% to $10 billion.

Morningstar analysts said $1.7 trillion is Anthropic's "fair equity value," but Anthropic's valuation could range from $500 billion to $3 trillion depending on the adoption rate of its tools, reflecting huge uncertainty over whether the AI boom can last.

It is understood that some institutional investors that have already been allocated IPO shares have begun reselling some of their allocations to other buyers at a premium, mirroring the off-market distribution trades that emerged on the eve of SpaceX's listing in June this year.

On Tuesday, a New York broker said it was selling "up to $500 million" of Anthropic shares on behalf of a venture capital institution. According to trading information seen by the media, these non-public shares were quoted at a 4% premium to the final IPO offering price set by the AI company.

Another venture capital group is selling $1.25 billion of Anthropic shares through a special purpose vehicle (SPV) at a valuation of $1.5 trillion. Early pre-IPO investors can use such vehicles to hold and cash out part of their stakes. Anthropic has sought to curb the use of SPVs and warned that it will not recognize any offers made by certain pre-IPO secondary-market brokers.

(Source: Cailian Press) Middle of the main body Embedded advertisement