Tech & AI
Anthropic faces investor pushback on its IPO valuation after the selloff
Investors planning to buy into Anthropic's IPO told the Wall Street Journal its valuation will likely come down after Thursday's tech selloff, with one putting it closer to $1 trillion.
Quick Read
- Investors planning to join Anthropic's IPO told the Wall Street Journal the valuation will likely come down after Thursday's selloff.
- Another investor said Anthropic could delay the listing, and the company could raise less money than planned.
- Blackstone has warned Anthropic may struggle to win an investment-grade rating, which could raise its borrowing costs.
- Anthropic is aiming to list on Nasdaq under the ticker ANT the week before Thanksgiving.
What did investors tell the Wall Street Journal?
Major investors planning to join Anthropic's IPO said the valuation will likely come down, the Wall Street Journal reported on Thursday. An IPO is a company's debut sale of shares to the public.
Why it matters: Another investor said Anthropic could delay the offering. That investor said it could be hard to win back institutions "burned in the recent selloff." The company could also raise less money than planned, the Journal reported.
The Claude maker is aiming to list on Nasdaq under the ticker ANT the week before Thanksgiving. It filed its registration document last month. Anthropic did not immediately respond to a request for comment.
Why did the selloff change the math?
Thursday's drop hit tech hardest. The Nasdaq-100, an index of the largest Nasdaq stocks that leans heavily on tech, tumbled 6.4%. The technology sector fund (XLK) fell 8.0%, and the S&P 500 lost 4.4%.
The selling was broad. Of 1,104 stocks tracked, 960 fell and 142 rose. The drop came after Democrats won control of Congress in the midterm elections.
An IPO price reflects what buyers will pay today for future growth. When listed AI stocks fall, buyers of a new AI company may want a lower price too.
What other doubts have surfaced?
Blackstone (NYSE: BX) has warned that Anthropic may struggle to get an investment-grade, or low-risk, credit rating after it lists. Missing that rating could raise its borrowing costs.
Michael Burry, the investor known for The Big Short, raised a separate question in a Substack post on Wednesday. He asked whether Anthropic's cloud partners were helping it look better financially before the IPO. He pointed to sales, marketing and partnership costs shrinking as a share of revenue in the amended filing.
What comes next?
What’s next: Executives and advisers are expected to meet in the coming days to discuss the plans, the Journal reported. Anthropic had been on track for the largest IPO ever, ahead of Space Exploration Technologies Corp.'s June offering.
The open question is whether buyers return to AI stocks before the planned listing. The October jobs report, due Friday at 8:30 a.m. ET, may shape the broader market's mood first.
For readers
What it could mean for you: If you own a technology sector fund, Anthropic's IPO could matter before it trades. Its debut price may act as a fresh benchmark for what buyers pay for AI growth. A lower price could weigh on how investors value the AI companies your fund already holds. A smooth listing might ease some doubts behind Thursday's tech selloff. A delay could leave that question open for longer.
Questions and answers
What valuation could Anthropic's IPO get?
Investors planning to take part told the Wall Street Journal the valuation will likely come down from Anthropic's target after Thursday's selloff. The company could also raise less money than planned.
When is the Anthropic IPO?
Anthropic is aiming to list on Nasdaq under the ticker ANT the week before Thanksgiving. One investor told the Wall Street Journal the company could delay the offering.
What did Michael Burry say about Anthropic?
In a Substack post on Wednesday, Burry questioned whether Anthropic's cloud partners were helping it look better financially before the IPO. He pointed to sales, marketing and partnership costs shrinking as a share of revenue in its amended filing.
The numbers
| Blackstone (BX) price | $119.82 |
|---|---|
| Blackstone (BX) change | −4.58% |
| Blackstone (BX) market value | $90 billion |
| Blackstone (BX) 52-week high | $163.50 |
| S&P 500 change | −4.36% |
| 10-year Treasury yield | 4.84% |
Thursday’s close
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Not investment advice.
