If There Was Ever a Reason to Avoid the Anthropic IPO, This Is It
The Anthropic initial public offering (IPO) might be the greatest fleecing of retail investors in Wall Street’s storied history.
The year has been marked by record-making events, such as SpaceX's historic IPO raising $85.7 billion and setting new highs for major stock indices. However, Anthropic, the creator of the Claude large language model, may present a cautionary tale for investors. Following its public registration statement filing, Anthropic's IPO is set to debut around Thanksgiving, with a potentially soaring valuation.
Despite the excitement surrounding AI infrastructure, Anthropic's share-unlock schedule for insiders is particularly concerning. The company outlines 23 separate lockup events, including one on the first trading day post-IPO, meaning some shares could be sold immediately. This accelerated insider lockup period contrasts sharply with SpaceX's staggered release, which enabled early insiders to sell shares within a few days.
The prospectus reveals that at least some insider shares will be sold on the IPO's first day, potentially flooding the market and depressing the share price. While the hype around Anthropic may initially boost its stock, historical data suggests that tech-focused IPOs often underperform. A study by Truist Financial found that only 43% of prominent tech IPOs from 2012 to 2021 rose 12 months after their debut, with an average year-one maximum drawdown of 55%.
This compares unfavorably to SpaceX's 54% decline from peak to trough. The data suggests that retail investor excitement for IPOs tends to fade quickly, making it a risky strategy.
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