Not Following Musk's "Take-It-or-Leave-It" Price: Anthropic (ANT.US) Roadshow Price Range of $70-78, Institutional Investors Become the Real Stars of IPO Pricing

Anthropic PBC (ANT.US) will seek the largest IPO in history next week, aiming to take that title from SpaceX (SPCX.US). But unlike Elon Musk's conglomerate, large investors will have greater influence over its IPO price amid volatile AI trading conditions. The Claude developer is testing investor interest in its IPO shares at a price range of $70 to $78 per share, unlike SpaceX's approachwhich set a fixed offering price of $135 per share directly during the marketing phase, giving the market only a "take-it-or-leave-it" choice. Although Anthropic aims to claim the title of the largest IPO in history, some market observers warn that it should not price too aggressively, and should make the price feel reasonable to institutional investors, leaving room for gains on the first day of trading. "The Anthropic deal is a more conventional roadshow format," said Harrison Rolfes, senior analyst for late-stage enterprise research at Pitchbook. "Relying on institutional demand to set the IPO price can reduce the probability of a broken issue." That does not mean a broken issue is impossible, however. The current market environment is full of variables, compounded by factors such as management changes at NVIDIA Corporation (NVDA.US), making the final stage of Anthropic's listing far trickier than SpaceX's $86.2 billion listing in June this year. In the quarter of SpaceX's listing, the Nasdaq 100 Index surged nearly 28%, providing support; the stock is now up 3% from its offering price. In the past three months, the Nasdaq 100 Index has fallen about 7% cumulatively, hit by multiple factors including U.S. rate hikes, widespread market concerns about excess AI debt supply, and voter resistance in the midterm elections to data centers supporting large models such as ChatGPT and Claude. Earlier market chatter that Anthropic's valuation could reach $2 trillion has also faded. "You can see they are really listening to the market," said Andy Tang, a partner at venture firm Draper Associates and a former tech investment banker. "They are proceeding with the IPO at a more conservative level." Anthropic's current fully diluted target valuation is about $1.4 trillion. The IPO plans to raise up to $64.4 billion, alongside a $26 billion private placement, with the two combined exceeding SpaceX's fundraising size. Jeff Zell, partner and senior research analyst at IPO Boutique, also said, "The timing of the listing window is likely an important reason why Anthropic cut its valuation and reduced the size of the offering." Private Placement The private placement is another major difference between the two companies' listing plans. SpaceX's IPO did not lock in clear cornerstone investors, while Anthropic has secured a $26 billion private placement led by Alphabet (GOOGL.US) and NVIDIA Corporation, with seven tech companies participating in total. David Erickson, an adjunct professor at Columbia University and former global head of equity capital markets at Barclays, believes that in a volatile market, the large placement sends a positive signal to the market of strong support from external industrial capital. At the same time, the private transaction requires no underwriting fees, with underwriting fees applying only to the public offering portion. Erickson added that investors participating in the placement must wait until the shares complete subsequent registration before they can sell; moreover, these companies are themselves part of Anthropic's computing power supply chain and have an incentive to hold long term. The two companies have another key difference: experience in accessing public capital markets. Musk has continuously financed Tesla, Inc. through investment banks for more than a decade and is well versed in Wall Street rules; Anthropic, founded only five years ago, is a newcomer to the capital markets. "Obviously, Elon Musk has extensive experience dealing with Wall Street, so he can dictate the terms of the deal, while Anthropic has not had that experience before, and I think they are acting on bank advice," Erickson said.