US IPO Weekly Winners & Losers

Anthropic’s mega IPO is on.

The generative AI giant flipped its S-1 on Monday, gearing up for an estimated $75 billion+ offering. It could surpass SpaceX as the largest IPO ever.

That makes now a good time to sign up for a free trial of IPO Pro.

Anthropic PBC (Nasdaq: ANT) is now on track to launch an IPO the week of November 9, after the US midterms, and price the week of November 16.

The 421-page filing is a treasure trove for prospective IPO buyers. Parts of it are a fun read, too: The company says it aims to “bring forth an age of miracles” while also warning about “existential risks to humanity.” You didn't see that in the Jersey Mike's prospectus! And it’s no surprise that AI comes up often – I count about 776 mentions. Somehow still fewer than the 800-plus in SpaceX's filing.

Some other thoughts after my first read:

• Growth is unprecedented, and the bottom line is better than expected. Revenue grew more than 14x year-over-year in the June quarter to $11.6 billion, a historic pace at this scale. Meanwhile, it had an operating income of nearly $1 billion that quarter.

• Customer and channel concentration is high. Two customers accounted for a combined 20% of revenue in the first half, while 48% of revenue was generated through cloud marketplaces (Google, Amazon, Microsoft).

• Governance is unusual. As a public benefit corp., Anthropic must balance its mission with profits. An independent trust elects most of the board, while a single co-founder-held share controls 50.1% of the vote, leaving IPO buyers little say.

• Compute commitments are massive. Anthropic has committed to spend more than $600 billion on computing and infrastructure through 2045, requiring continued rapid growth to justify the spending.

• Staggered lock-up releases could create selling pressure. Like Cerebras and SpaceX, Anthropic plans a tiered release schedule that could affect trading in the months after the IPO. I count 22 distinct lock-up releases. At the same time, it could enter major index funds relatively quickly.

• The market opportunity is astronomical but imprecise. Anthropic says its products impact the more than $40 trillion in economic value from knowledge workers, without giving a true TAM. Figures like this are more marketing than math, but it gives you a sense of the company's ambitions.

Three IPOs priced this week, but only two traded. Nigerian-focused fintech OPay announced it raised $304 million, but inexplicably did not trade on Friday, putting the status of the deal in question. Cornerstone investors had indicated on nearly 90% of the offering. Two biotechs (ASPE, BBTX) traded down slightly from offer. One small-cap bank (GBC) completed a direct listing.

Another spike in volatility has dampened prospects for an IPO pickup ahead of Anthropic, with the VIX near 20. This week, investors navigated strong GDP growth and consumer spending, a mixed bag for earnings, and the Fed holding rates flat ahead of US midterms.

The IPO Index shed -2.2% this week as the S&P 500 finished off -0.6%. Reddit was the week’s loser, off -36.4% despite beating on Q3 earnings, as it warned that Google’s AI search summaries are cutting referral traffic and issued disappointing guidance. Home-based care provider BrightSpring Health Services, a defensive play, led the new stock leaderboard, up +11.3% on a Q3 beat and raise.