00:00Anthropic has filed confidentially for an IPO with the SEC. This is a draft S1, again, confidential.
00:07But let's get a little bit more detail now with Bloomberg's Anthony Hughes. He's an IPO reporter for us,
00:12as well as James Saifert of Bloomberg Intelligence, who covers ETFs.
00:16And Anthony, I'll start with you on this Anthropic news because, again, we're talking about confidential draft paperwork for their
00:24IPO.
00:24So we don't have many details beyond that, but tell us what we know so far.
00:30Yeah, typically when we get to this stage of confidential filing, there's not a heap of extra information.
00:34But sometimes this filing, which will be in at the SEC, will have a fair bit of detail worked out,
00:41including the banking syndicate.
00:43Sometimes they're not that far down the track, and you can file without the banking syndicate, for instance,
00:46which is actually what SpaceX did in March.
00:50But really what this does indicate is that with all the recent news around Anthropic,
00:56which has obviously been very positive for their valuation, getting up and around a trillion dollars,
01:01it's really time for them to go. And I think it's a bit of a race at the moment in
01:05terms of these AI companies.
01:06And really, the thing about this filing, it really tells you that they're probably looking at a post-Labour Day
01:14listing,
01:16because Anthropic will be such a hotly sought IPO that they'll be able to, they'll probably be able to go
01:22through this process
01:23in a way that's, you know, there's not going to probably be a lot of delays, apart from the fact
01:27that they'll be getting SEC review,
01:29and the SEC might be giving them a bit of back and forth and questions.
01:31But basically, this process is going to be as rapid as it gets.
01:35One of the things we've been hearing with these IPOs, SpaceX, Anthropic, and OpenAI, which we've all diagrammed,
01:40so these passive indexes are going to have to buy a lot of these stocks.
01:43People are like, oh, they're the exit liquidity.
01:45How much of that is factored into this IPO, and how big would Anthropic be relative to, say, SpaceX?
01:52Well, I think, obviously, Anthropic's valuation is going up substantially over time, and a lot will depend on the environment
02:00in the market at the time in terms of how people are thinking about AI.
02:03I mean, obviously, there's a lot of debate at the moment about whether AI stocks are expensive or cheap,
02:08and it's a pretty vigorous debate, isn't it, at the moment?
02:11So, I mean, obviously, at the moment, this is a great time for Anthropic to go public,
02:17given some of the valuations we're seeing of AI-adjacent companies and a whole bunch of names in this area.
02:23But in terms of the index discussion, I think the index providers have decided that it's appropriate for companies
02:30that are very large private companies that they should be represented relatively quickly into the index,
02:35because if that's not the case, then maybe those indexes are not very representative of the market that it is.
02:40And obviously, SpaceX, we're talking about a $2 trillion valuation and $1 trillion in the case of Anthropic,
02:45and we've got OpenAI, perhaps $1 trillion.
02:48These are obviously going to be very large investments, and if people don't have them in their index funds,
02:54then those index funds are not really representing the market.
02:57So they are making somewhat of a special treatment for these companies.
03:03But on one level, it's justified.
03:06On another level, it's helping to create a lot of demand for this stock,
03:11which could help smooth out the aftermarket performance.
03:15Well, James, let's talk a little bit about that, because the addition of SpaceX,
03:19that fast-track into a lot of these indexes, has caused a lot of controversy.
03:23And that's where a lot of the conversation has been, around SpaceX specifically.
03:28But how would Anthropic factor into that conversation as well, were it to go public in the next few months?
03:34Yeah, so it all depends on how much actually comes out in that IPO, what the float is.
03:39SpaceX is targeting around $75 billion.
03:42And right now, the most recent valuation that you're hearing is around $1.8 trillion.
03:46So we're talking less than 5% of the float.
03:48General assumptions for Anthropic and OpenAI, people are generally assuming it will also only be 5% of the float,
03:55maybe 10% at the high end.
03:57So that will determine how much buying there is.
03:59But no matter how you slice it, the way that these indexes are set up, Russell specifically in the NASDAQ
04:04100,
04:05assuming they list on NASDAQ, that will equate to, like, a significant portion of the IPO float, right?
04:11So we're looking at just from, if you include the S&P 500 for SpaceX, up to, like, $20 billion
04:17in buying of that $75 billion.
04:19The benefit is that the S&P 500 wouldn't add for maybe six months, but Anthropic would be the same
04:24thing.
04:24We're talking about 25% of the float that could be bought up by these passive indices in the first
04:28six months.
04:29James, this is the big, the S&P 500 is the big one, and that decision isn't out yet.
04:34When are we expecting a decision from the S&P 500, and what odds do we currently have that they
04:40are going to vote to fast track?
04:42Yeah, I mean, the odds were probably 75%, 80%, if you talk to Rob Duboff, who is our ESG.
04:47And, you know, most people hear ESG, and they don't realize that includes the G in governance,
04:51and that's where a lot of this comes down to, and we pay attention to indices.
04:54But the date we're watching is June 8th, so we should know by June 8th that the S&P is
04:59going to do this.
05:00Russell already did it just recently last week.
05:02NASDAQ did it weeks before.
05:04These consultations are outstanding, but our expectation and my expectation is that this is going to, the S&P is
05:09going to follow suit.
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