Anthropic expected to raise about $72 billion in IPO next week

Traders expect Anthropic to raise about $72 billion in its initial public offering, which is due to be priced next week, though their confidence in that neighborhood weakened on Saturday.

A raise of $65 billion to $75 billion is still seen as the single likeliest result, but it went from roughly an even bet early Saturday to less likely than not by the evening. Most of the drop came in one step around the middle of the day, and the odds drifted a little lower afterward. The reason is not yet clear: no timely development was found that explains the decline.

Bets on larger totals did not pick up the slack. A raise of $75 billion to $85 billion remains unlikely and eased slightly, while totals of $85 billion and above are long shots. Overall, traders' expectations run from under $65 billion to $94 billion.

Those expectations sit above what the company itself has proposed. Anthropic filed for an IPO on Oct. 26. Its Nov. 10 preliminary prospectus proposed selling 825 million shares at $70 to $78 each, including shares sold by existing holders. That works out to gross proceeds of $57.75 billion to $64.35 billion, short of $65 billion at every price in the indicated range. Reuters had reported a day earlier that preliminary terms contemplating nearly $70 billion were circulated to banks and then retracted.

The prospectus also describes a $26 billion concurrent private placement and an option for underwriters to sell additional shares. Neither counts toward the total traders are betting on, which covers only shares sold in the offering at the final price.

Demand appears strong. Reuters reported on Friday that investors were flocking to the offering, and Axios said it was oversubscribed, though it added that the prices at which investors had placed orders were unclear. Heavy demand can lead a company to price above its range or sell more shares, which may explain why traders see a total above the proposed terms.

The roadshow is scheduled to run through Wednesday, Nov. 18, when the offering is expected to be priced, according to Reuters. A prospectus filed for European investors says the underwriting agreement is expected on or about the same day. At the proposed 825 million shares, the final price would need to reach approximately $78.79 for proceeds to hit $65 billion. A change in the number of shares sold could also shift the total. The final prospectus will settle the question.