Unlike Elon Musk’s “One Price” Approach: Anthropic (ANT.US) Roadshow Pricing Inquiry at $70-78, Institutional Investors Become the True Decision Makers in IPO Pricing

According to Zhitong Finance APP, Anthropic PBC (ANT.US) is set to launch what may become the largest IPO in history next week, aiming to overtake SpaceX (SPCX.US) for the title. However, unlike Elon Musk’s conglomerate, major investors will have greater influence over its IPO pricing amid the current turbulence in the artificial intelligence (AI) market landscape.

This Claude developer is gauging investor interest in its IPO shares at a price range of $70 to $78 per share, in contrast to SpaceX’s approach—which locked in a fixed price of $135 per share during roadshows, leaving the market with a simple “take it or leave it” choice.

Although Anthropic is determined to claim the largest IPO title, some market observers warn that it should avoid overly aggressive pricing, ensuring institutional investors find the valuation reasonable and leaving room for gains on the first trading day.

Pitchbook Senior Late-Stage Analyst Harrison Rolfes commented: “Anthropic is using a more conventional roadshow model. Relying on institutional subscription demand to determine the IPO price can reduce the probability of the stock breaking below its issue price post-listing.”

However, this does not guarantee there will be no post-IPO decline. The current market environment is full of uncertainties, compounded by management changes at Nvidia (NVDA.US), making Anthropic’s closing stage of the IPO process far more challenging than SpaceX’s $86.2 billion listing in June this year.

In the quarter when SpaceX went public, the Nasdaq 100 index surged almost 28%, providing strong support; currently, the stock is up 3% from its IPO price. Over the past three months, however, amid US interest rate hikes, widespread concerns over an oversupply of AI-related debt, and data centers supporting large models like ChatGPT and Claude facing voter opposition during midterm elections, the Nasdaq 100 index has dropped about 7%. Previous market rumors that Anthropic’s valuation could reach $2 trillion have also faded away.

“It’s clear they are in tune with market sentiment,” said Andy Tang, a partner at Draper Associates and former tech investment banker. “They are proceeding with the IPO at a more conservative level.”

Anthropic is currently targeting a fully diluted valuation of around $1.4 trillion. This IPO aims to raise up to $64.4 billion, combined with a $26 billion private placement, bringing the total fundraising above that of SpaceX.

IPO Boutique partner and senior research analyst Jeff Zell also stated, “IPO window timing likely played a crucial role in Anthropic lowering its valuation and scaling back its fundraising target.”

Private Placement

Private placements are another major difference between the two companies’ listing plans. SpaceX’s IPO did not secure specific cornerstone investors, while Anthropic has already arranged a $26 billion private placement led by Alphabet (GOOGL.US) and Nvidia, with a total of seven tech companies participating.

Columbia University adjunct professor and former Barclays Global Head of Equity Capital Markets David Erickson believes that, amid market volatility, such a sizable placement signals to the market strong support from external industry capital. Moreover, this private transaction incurs no underwriting fees, which only apply to the public offering portion.

Erickson added that investors involved in the placement must wait until the shares are registered before selling; besides, these companies are part of Anthropic’s computing power supply chain and have motivation for long-term holdings.

There’s also another key difference between the two companies: experience in dealing with public capital markets. For over a decade, Musk has been raising funds for Tesla through investment banks and is well-versed in Wall Street rules; in contrast, Anthropic, founded less than five years ago, is a newcomer to the capital markets.

“Obviously, Elon Musk has a wealth of experience dealing with Wall Street, so he can dictate the transaction terms. Anthropic, having no such prior experience, is likely following the banks’ guidance,” said Erickson.