{"text":[[{"start":8.54,"text":"On Monday, whilst merrily blogging our way through Anthropic’s S–1, Alphaville thought we’d found the kind of story worthy of a front-page MainFT splash."}],[{"start":17.8,"text":"We thought we’d discovered numbers in the filing which, when mathed together, told us that the company — fastidious in directly not telling us what they thought they might be worth — had accidentally told us what they thought they were worth. And we thought that the magic number was $1.2tn."}],[{"start":33.94,"text":"We got in touch with Anthropic, which declined to comment. This is understandable because commenting on valuation could get the company into hot water with the SEC. But does our math actually math? Let’s take a look."}],[{"start":34.44,"text":"Mathing the math"}],[{"start":46.92,"text":"Alphaville is staffed by simple people, and luckily financeland can be deceptively simple. Start a company, issue a squillion shares, and sell one to an unconnected punter for a dollar? You now run a squillion dollar enterprise."}],[{"start":61.12,"text":"Sure, you might open yourself to civil or criminal fraud charges if you use this purported valuation to persuade a bank to lend you money, obtain preferential commercial terms or convince other investors to purchase additional shares at this largely untested valuation. But few achieve the lofty peaks of squillionairehood without committing securities fraud, so bring it on."}],[{"start":81.88,"text":"Back to Anthropic: do we have the info to pull this Share Count x Share Price = Enterprise Value trick?"}],[{"start":88.04,"text":"Anthropic doesn’t plainly state its share count. But it does write on page 12 of the S–1 — under the section headed ‘Our Commitment to Public Benefit’ — that it “contributed 846,840,960 shares of our Class N common stock, representing 5% of our fully diluted shares as of June 30, 2026”."}],[{"start":88.54,"text":"Mathing it out:"}],[{"start":89.04,"text":"846,840,960 shares ÷ 5 per cent = 16,936,819,200 shares"}],[{"start":89.54,"text":"🥳 🥳 🥳"}],[{"start":122.16,"text":"All we need now is a price per share."}],[{"start":124.26,"text":"Page F-46 shows a series of price points at which Series A, B and C stock were created over time, and page II-3 tells us roughly when these occurred. Put them together, and we can make this fun chart of explosive valuation growth:"}],[{"start":null,"text":"

"}],[{"start":140.4,"text":"But even if we pretend that our June 2026 share count is right, it’s unlikely to have been stable over time. So the further back in time you go on the second valuation panel, the greater it likely overstates enterprise value."}],[{"start":153.72,"text":"Also, Alphaville isn’t completely confident that there aren’t annoying little financial twists attached to various prior financing rounds that might make tranches of preferred stock sold in Series A through H more or less valuable than just the Class N common stock (to which their buyers will be subject to mandatory conversion at the point Anthropic floats on the stock exchange). Basically, massive health warnings on that second panel."}],[{"start":179.82,"text":"Putting such quibbles aside though, if you hover your pointer over columns on the right, the implied valuations are only slightly higher than overall enterprise numbers reported at the time of recent valuations."}],[{"start":191.5,"text":"Where is this all going?"}],[{"start":193.22,"text":"The latest valuation of ca $1tn is less than the $1.2tn figure that we talked about at the top. And it has been heavily reported, so it’s worthy neither of a MainFT splash nor an Alphaville post. What’s actually new?"}],[{"start":207.8,"text":"Well, after the 335 pages of the normal prospectus we get 65 pages of notes to the consolidated financial statements. And page F-65 contains the following paragraph:"}],[{"start":220.16,"text":"In the third quarter of 2026, the Company recognized $2.0 billion within other operating and administrative expense on the consolidated statement of operations for the initial recognition and change in fair value of its obligation to match employee donations made in August 2026 under the Donation Matching Plan. In October 2026, the Company issued approximately 28.0 million shares of Class N common stock upon settlement of this donation matching obligation. The liability will be remeasured to fair value through the settlement date in the fourth quarter of 2026."}],[{"start":257.56,"text":"That’s right — employees donated a tonne of shares in August. And because the company runs a donation-matching scheme for non-founders, this means that someone somewhere in the company — maybe Dario Amodei, maybe a junior accountant, who knows — was tasked with assigning a dollar value to the donation-match in order for the financial statements to add up. And that dollar value was $2.0bn. More maths:"}],[{"start":285.84,"text":"$2.0bn ÷ 28mn shares = $71.43 per share"}],[{"start":289.16,"text":"Let’s update our grid chart with this new number:"}],[{"start":null,"text":""}],[{"start":285.84,"text":"16,936,819,200 shares X $71.43 per share = $1.2 trillion big ones!"}],[{"start":286.34,"text":"💃 🪩 🕺"}],[{"start":303.28,"text":"It all seems so straightforward. However, reality is often annoyingly complicated, and there are a host of reasons why Alphaville’s maths probably doesn't actually math properly."}],[{"start":313.92,"text":"Where and why things get complicated"}],[{"start":316.4,"text":"Anthropic obviously wasn’t in a position to tell us anything, so we got in touch with David Greenberg, a valuations expert at Forvis Mazars, and Mark Clatworthy, professor of accounting at University of Bristol Business School, to sanity-test our work."}],[{"start":330.88,"text":"Greenberg told us our approach was simplistic given the complexity of Anthropic’s cap table, and noted the likely fluid nature of its share count. He told us that the inputs we used were all rounded (eg, 5 per cent, $2.0bn and 28mn shares) and that the fair value number is caveated by Anthropic’s commitment to remeasure the fair value “through the settlement date in the fourth quarter of 2026”."}],[{"start":354.08,"text":"In short, he told us that we probably didn’t have enough information to prove that our maths mathed, even if it turns out to be not far off any actual number."}],[{"start":362.84,"text":"And Clatworthy told us such internal valuations might be discounted to the shares’ estimated true value to account for lack of marketability. That discount could be anywhere from 10-50 per cent, he said, so trying to calculate enterprise value from these figures would be “very noisy”."}],[{"start":378.88,"text":"This is a shame. It would be nice to have a solid unnoisy number signifying what Anthropic thinks it’s worth."}],[{"start":385.16,"text":"Still, things move fast in tech and August feels positively Jurassic when it comes to AI. Investors seem to be reckoning the company’s worth now to be more in the $1.5-2tn range, with some now months-old (ie ancient) internal assessment unlikely to shake these estimates. And, as Lex reminds us, while the prospectus is a fascinating source of information about how we got here, it’s probably a fat lot of use in giving us the real information we need to assess where it’s going."}],[{"start":415,"text":"Ultimately, the only number that really matters for the company’s valuation is how much investors reckon it’s worth when the book actually builds."}],[{"start":415.5,"text":"Further reading:"}],[{"start":416,"text":"— Anthropic S-1 as it happened: Inside the Claude maker’s 335-page IPO plan (FTAV)"}],[{"start":431.84,"text":"— How much is Anthropic really worth? (Unhedged pod)"}],[{"start":435.08,"text":"— Why you shouldn’t bother reading the Anthropic IPO filing (Lex)"}],[{"start":439.08,"text":"— Lex in depth: Anthropic at $2tn isn’t far-fetched (Lex)"}],[{"start":443.36,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793369128_1468.mp3"}