Amazon shares rise as Anthropic sets Nov. 19 IPO date

Amazon Amazon.com, Inc. ↗ 0.56% shares rose more than 1% on Thursday as investors weighed what its stake in Anthropic could be worth once the AI developer goes public. According to Benzinga, the gain came without company-specific news, while the S&P 500 ↘ 0.40% edged higher. Anthropic's amended filing shows Amazon holding 1,920,511,218 Class N shares after the offering, with another 1,563,617,444 shares to be issued later as a 12% ownership cap allows, GuruFocus reported via Yahoo Finance.finance.yahoo.com+1

The timing is now firm. On Thursday, Anthropic said it will price its offering on Wednesday, Nov. 18, and start trading under the ticker "ANT" on Thursday, Nov. 19, Yahoo Finance reported. The company plans to sell 825 million shares at $70 to $78 each, which would value it at $1.3 trillion to $1.45 trillion.finance.yahoo.com

How the stake is structured

As of Sept. 30, Amazon held $6.2 billion of principal in Anthropic convertible notes. Just before the offering closes, $579.3 million of that will convert into 276,827,518 Class N shares, the most it can receive without going over the 12% cap, according to a summary of the prospectus. Class N shares carry economic rights but no general voting power, GuruFocus noted. Amazon could waive the cap but has kept it in place for the IPO, and Trefis estimates its fully converted ownership at about 19%.finance.yahoo.com+2

At $78 a share, Reuters Thomson Reuters Corporation ↗ 0.52% put the stake at about $271.8 billion, compared with the roughly $18 billion Amazon has invested, GuruFocus reported. Amazon's own quarterly filing valued the notes at $146.2 billion as of Sept. 30, up from $97.9 billion in June, and its Anthropic nonvoting preferred stock at $92.5 billion, Benzinga reported.benzinga.com+1

Paper gains and earnings swings

Once Anthropic trades publicly, Amazon's stake will have a price every day. Trefis estimated that each $1 move in Anthropic's shares would change the value of Amazon's 1.92 billion shares by about $1.9 billion. The gains will stay on paper for some time, though. Lock-ups of up to 365 days and the staged share issuance mean Amazon cannot cash out quickly, and mark-to-market swings could make its reported earnings more volatile, GuruFocus noted.finance.yahoo.com+1

The two companies are also tied commercially. Amazon is one of seven companies, along with Alphabet ↗ 1.72% and Nvidia ↘ 5.19%, that have agreed to buy a combined $26 billion of Class N stock at the IPO price in a concurrent private placement, according to a filing summary. Anthropic also trains its Claude models partly on Amazon's Trainium chips. Alphabet will hold about 1.79 billion Anthropic shares after the offering, Trefis reported. According to GuruFocus, the key test is the Nov. 18 pricing and "whether AWS keeps winning Anthropic's compute spending after the listing."finance.yahoo.com+2