#85: Anthropic Stock After the IPO — The GAME PLAN Every Investor Needs

Craig Stephens (0:00)

The Anthropic IPO is next Thursday, November 19th. You've already prepared to invest, so what happens next, and what's the game plan when the stock starts trading? In IPO radar news, Thinking Machines, Shield AI, and Mercor have all doubled their valuations. Welcome to the Access IPOs Podcast, where we explore opportunities to invest in the world's most innovative and disruptive pre-IPO companies. I'm Craig Stephens, founder of Access IPOs, and the Anthropic IPO is next Thursday, so this is the last recorded show I'm gonna do before the debut. So I want to address some of the information that came to light in the updated terms that came out on Tuesday the 10th. And I'm gonna share my strategy, how I plan to invest in the IPO, and what you should be thinking about if you're planning to invest as well. We've been anticipating that Tuesday the 10th updated terms for some time now. And to mark the event, I did a live stream on YouTube Tuesday night. The recording is out there. If you want to take a look, there was a decent turnout. People came to the show, asked questions. I had a chance to answer them. And I had some tech issues at the beginning, but got through that and it went pretty well. So I'm officially a YouTube live streamer now. I'm planning to do more of these, hopefully on a somewhat regular basis. And the next one I'm planning to do is Thursday morning. The morning we're getting allocations for the Anthropic IPO. While I'm live, people can chime in, let us know what kind of allocations they're getting from the various brokers. So I'm going to schedule out that live stream and I'll put a link in the Sunday newsletter if you want to check it out. Thursday morning, we'll also be very active in the Patreon community and I'm doing a massive discount starting today for Black Friday, Cyber Monday from now through the end of November. Sign up now and get 30 percent off your annual membership. That's on top of 15 percent you already get for an annual membership. That's the cheapest it's ever been and it's never been a better time to join the Access Club, headed into the Anthropic IPO. Use coupon code NOV26 to save. So Tuesday, we finally got the offering and just like the rest of the filing, it's fairly complicated and still subject to change. The offering is 825 million shares. About 24 million of those are sales from existing investors. About 801 are newly issued shares. The initial price range is 70 to 78 dollars per share. We're already hearing that that's a bit low. We're expecting to see a raise in the price or the offering. So we may see that by the time you watch this show or we'll see it Monday at the latest. The net proceeds from this deal is somewhere around 85 to 90 billion, which is a lot of money to raise, but they got a lot of spending to do. And the estimated IPO valuation is about 1.4 trillion, fully diluted. So there's a lot of ways you can calculate that number, but 1.4 is about the consensus right now. And if you remember back to my interview last week with Sam Dogen, his ceiling was about 1.5 trillion and we may still hit that again. We may be expecting a bump in either the price or the offering, which would then bump up the valuation. So watch for changes to those numbers, increases, additional filings, certainly by Monday or so. And then by Tuesday, our orders are going to need to be finalized. So now is the time. Finalize your orders. If you're still moving around money or hoping money is going to clear in time, you're running out of time. Your orders should be in by now. And if you need to adjust those down, you will have an opportunity. The night before, you can reduce your order at some brokers and you can cancel your order if you want to. And those orders need to be finalized so that the bookrunners, the underwriters can take all those orders and consolidate them into a big model that they're then going to come up with the final IPO price and that's going to come out Wednesday evening after the market close. You won't find out your allocations until Thursday morning. Sometimes it goes late into the morning and that's if you get an allocation at all. I'm going to talk more about retail access here in a moment. I'm going to share with you what one of my sources told me. And it's making me a little nervous about this one. So stick around for that. So we're going to take a look at some of the key components of that updated filing. I'm going to share with you my strategy, how I'm requesting shares, where I'm requesting shares, and what I plan to do with them after the open. And then we'll list out some things that you need to pay attention to headed into the deal. But before we do a quick word from our sponsor. 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An investment in the fund is speculative and involves substantial risks, including possible loss of the entire investment. Carefully consider the fund's investment objectives, risks, charges and expenses before investing. The fund's SEC filings, including any current prospectus in the fund's annual and semi-annual reports, are available at getvcx.com. Review them carefully before investing. This is a paid sponsorship. The host is Long VCX. Thanks to our sponsor for supporting the show. I want to get into some of these things that we learned about in that updated filing. And some of this stuff is complicated. So the way I interpret it or I interpret it with my AI may not be how exactly you read about it from other sources, but there's a lot of variables here. So read through the filing on your own, run the numbers through your own AI so you understand what's going on. So this is going to be one of the largest IPOs ever, if not the largest, we're still not sure where the final numbers come in. Compared to SpaceX, there's going to be more shares out there. The SpaceX offering was 555 million. This offering is 825 million at a lower share price between 70 and 78 At this point, SpaceX was 135 There was no range. Now, according to my calculations and how I interpret the S1 filing, we're expecting a float. That is the number of shares that are tradable on the first day versus the total outstanding shares. The float is about 6.3% or 7.2% with the full green shoe. The green shoe is an option for the underwriters to buy an additional 10 to 15% of shares from the company at the offering price. They're pretty standard in these deals. The SpaceX IPO, the full green shoe was exercised by the underwriters. This deal we don't know. So it could go up to 7.2 on that first day of trading. That's the float. And the more shares floating, the less likely you are to get a spike. SpaceX only floated about 4.2% of the float for their deal. So this is considerably larger. So there's going to be more shares, more float. And then the kicker that I talked about last week or two weeks ago is that the staggered lockup allows for employees and executives to sell 10% of their holdings, up to 10% of their holdings on day one. So if you add in that potential float, it could be up to somewhere around 9% on day one. And that's good to see. I don't like to see big spikes on the first day because that just means all the institutional investors made a lot of money and a lot of the retail did not, except for those of us who receive shares. This is a look at the offering page on page 19 in the filing and it's complicated. There's a lot going on here. Most of us aren't experts or CFOs, so you work with your AI to calculate this out. I mean, usually I can calculate it without the AI, but with this one, it's definitely more complicated. Another interesting piece of this updated filing, which takes me back to my conversation with Sam Dogan last week, is this concurrent private placement. Sam talked about the presence of anchor investors. These are Mag-7 type companies with a lot of cash who are willing to invest at the IPO price and hold for the long term. We found out in the filing there's this carve out for private placement of about $26 billion, and those investors include Google, NVIDIA, AMD, Broadcom, Micron, Microsoft and TSMC. But according to what Sam said, this is a good sign that there are these anchor investors who will be buying up some shares. The retail float is coming from a different pool of shares. This is a separate placement, which takes me to the retail sales portion of this on page 337