Anthropic bankers weigh raising IPO valuation to $1.5T

Anthropic's bankers are getting ready to raise the price of its initial public offering after strong investor demand, which could lift the Claude maker's valuation to $1.5 trillion or more, the Financial Times reported. The shares could be priced above the $70 to $78 range the company set less than a day earlier. That could push total funds raised past $100 billion, according to a TLDR summary of the FT report.ft.com+1

A higher price would reverse weeks of lower expectations. Bankers had floated a $2 trillion valuation over the summer, and some investors had called even $1.5 trillion "a stretch" in the days before the terms were filed, CNBC reported.cnbc.com

The filed terms

In an amended filing on Tuesday, Anthropic said it would sell 825 million Class A shares at $70 to $78 each. At the top of the range, the offering would raise about $64.4 billion and value the company at roughly $1.4 trillion on a fully diluted basis, Reuters reported. Excluding options and similar securities, the market value would be about $1 trillion. The range valued Anthropic at $1.26 trillion to $1.41 trillion, above its last private valuation, the New York Times reported.nytimes.com+1

Goldman Sachs ↗ 0.44% and Morgan Stanley ↗ 0.25% are leading the deal. Underwriters have an option to buy 123.75 million more shares, according to TechCrunch. A separate private placement involving companies including Nvidia ↘ 5.47%, Microsoft ↘ 2.20% and Alphabet's ↘ 0.38% Google would bring combined proceeds to about $85 billion, Investopedia reported.techcrunch.com+1

Demand builds quickly

The order book was already covered across the range on Tuesday, and institutional demand was running stronger than it had for SpaceX at the same stage, people familiar with the deal told CNBC. Anthropic plans to price the shares on Wednesday, Nov. 18, and start trading on the Nasdaq ↗ 1.40% on Thursday, Nov. 19. It is aiming to give about 20% of shares to retail investors, compared with the usual 5% to 10%. CNBC's Jim Cramer pointed to the company's annualized revenue run rate of $81 billion at the end of October as support for the valuation, CNBC reported.cnbc.com+1

A test for AI stocks

The deal comes during a sell-off in AI stocks that had cut into valuation hopes, Fortune reported. Earlier in the week, Anthropic briefly sent banks terms of about 867 million shares at $70 to $80, then withdrew them as inaccurate, according to Reuters. Some observers still see room for a higher price. "The $1.5 trillion valuation seems toppy and maybe needs to be adjusted lower to attract potential investors," Trade Nation analyst Lawrence Mills told City AM, while Morningstar puts Anthropic's fair value at about $1.7 trillion.fortune.com+2