Don't learn Musk's “one price”: Anthropic (ANT.US) roadshow asks for $70-78, and institutional investors become the real protagonists in IPO pricing

The Zhitong Finance App learned that Anthropic PBC (ANT.US) will hit the largest IPO in history next week, with the intention of taking this title from SpaceX (SPCX.US). However, unlike Elon Musk's corporate group, large investors will have more influence over their IPO prices at a time when the artificial intelligence (AI) trading landscape is in turmoil.

The Claude developer is testing investors' interest in its IPO shares in the price range of $70 to $78 per share, which is different from SpaceX's approach — the latter directly determines a fixed issue price of $135 per share during the promotion phase, giving the market only two options: “accept or discard.”

Although Anthropic aims to take the title of the biggest IPO in history, some market observers warned that it should not be too aggressive in pricing; it should make institutional investors feel that the price is reasonable and leave room for growth on the first day of the IPO.

Harrison Rolfes, senior analyst at Pitchbook's late-stage corporate research, said, “Anthropic uses a more conventional roadshow model. Relying on institutional subscription requirements to determine the IPO price can reduce the probability of an IPO breaking.”

But that doesn't mean it won't break. The current market environment is full of variables, compounded by factors such as NVDA.US (NVDA.US) management personnel changes. The final stage of Anthropic's listing process is far more difficult than SpaceX's $86.2 billion listing in June this year.

In the quarter SpaceX was listed, the NASDAQ 100 Index surged nearly 28% to protect it; currently, the stock is up 3% from the issue price. However, in the past three months, due to multiple factors such as the US interest rate hike, general market concerns about the oversupply of AI debt, and voter resistance to data centers supporting big models such as ChatGPT and Claude in the midterm elections, the NASDAQ 100 Index has fallen by a cumulative total of about 7%. The previous rumor in the market that Anthropic's valuation is expected to reach $2 trillion has disappeared.

“It can be seen that they are really listening to the market,” said Andy Tang, a partner at venture capital firm Draper Associates and a former technology investment banker. “They are advancing the IPO at a more conservative level.”

Anthropic's current target is a fully diluted valuation of approximately $1.4 trillion. The IPO plans to raise up to US$64.4 billion and support a US$26 billion private placement. Together, the two will surpass SpaceX's.

Jeff Zell, partner and senior research analyst at IPO Boutique, also said, “The timing of the listing window is probably an important reason why Anthropic lowered its valuation and reduced the scale of fund-raising.”

Private placement

The private placement is another major difference between the two companies' plans to go public. SpaceX's IPO did not target clear cornerstone investors, and Anthropic has confirmed that a total of 7 technology companies will participate in a total private placement of 26 billion US dollars, led by Alphabet (GOOGL.US) and Nvidia.

David Erickson, an adjunct professor at Columbia University and former head of global equity capital markets at Barclays, believes that under volatile market conditions, this large placement sends a positive signal of strong support from external industrial capital to the market. At the same time, there is no underwriting fee for this private equity transaction; the underwriting fee is only for the public offering portion.

Erickson added that investors participating in this placement will not be able to sell until their shares have completed subsequent registration; moreover, these companies themselves are in the Anthropic computing power supply chain and are motivated to hold on for a long time.

There is another key difference between the two companies: their experience in connecting with open capital markets. Musk has continued to finance Tesla through investment banks for more than 10 years and is familiar with Wall Street rules; Anthropic was founded only five years ago and is a new recruit in the capital market.

“Obviously, Elon Musk has extensive experience dealing with Wall Street, so he can control the terms of the deal, and Anthropic had no such experience before; I think they are acting on the bank's advice,” Erickson said.