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points by kinnth 3 days ago | 0 comments

Isn't the issue tho, that google launched at i dunno a 1bn market cap and grew as the internet grew.

what you're buying into here is a company that is already large on the idea of growth over the next 10 years.

Modern IPO's just reek of investors cashing out

> google launched at i dunno a 1bn market cap and grew as the internet grew

Google closed its first trading day "worth more than $25 billion" [1] with $1.5bn revenues, up 234% from 2002's $440mm [2]. That's a 16x revenue multiple, 0.07 growth adjusted [3].

On a similar revenue multiple, Anthropic's $16.3bn half-year earnings are worth $543 billion. Adjust for Anthropic's 1,400% YoY growth and you're well over $3 trillion.

Obviously, it's a lot harder to grow at a thousand percent from a $16bn baseline versus a few billion. But purely on a multiple basis, Anthropic is in a similar ballpark as Google.

[1] https://www.nytimes.com/2004/08/19/technology/shares-of-goog...

[2] https://www.sec.gov/Archives/edgar/data/1288776/000119312504...

[3] https://www.investopedia.com/terms/p/pegratio.asp

[–] extraextra 3 days ago

If only it was that simple, to switch multiples around between random companies and come up with valuations

Google was profitable, free cash flow positive and had no debts basically

Anthropic is burning money by the millisecond, no profits, free cash flow negative and has lots of debts & commitments

[–] ygghutttff 3 days ago

Correct does that poster actually know what comparables are?

Comparables are not by peer group or sector.

It’s cash flows, growth and risk bud. If you want to do peer group - go ahead - just don’t forget to control for differences..

Price to sales multiples are internally inconsistent by definition.

[–] JumpCrisscross 3 days ago

Is there an internet rule for folks asking if someone else knows something following it with a completely wrong definition of that thing?

[–] solyin 2 days ago

It happens so often that it's an Internet meme with its own subreddit by this point.

No You're Thinking Of.

https://www.reddit.com/r/NYTO/

[–] runako 3 days ago

As another check, SpaceX is trading at ~62x sales with a growth rate in the 30% range. Assigning the same sales multiple puts Anthropic at ~$2T market cap. Add in a factor for much faster growth (and non-GAAP profitability) and $3T is a really easy place to end up.

[–] extraextra 3 days ago

Sure, you can throw any numbers around, if you wish to get any valuation you want.

In reality, a valuation based on revenue (sales) is bonkers to begin with, but even worse when you consider that Anthropic has so much debt that it doesn't have positive equity value, it's in a deficit ("When liabilities attached to an asset exceed its value, the difference is called a deficit and the asset is informally said to be "underwater" or "upside-down""). At least SpaceX has more assets than liabilities.

[–] runako 3 days ago

There are a set of mistakes in what you wrote, but

> SpaceX has more assets than liabilities.

is definitely a choice thing to write on the day SpaceX announced a $40B debt deal to purchase compute to run other companies' models. Based on available information, this will put SpaceX into a place where it has more liabilities than assets.

[–] extraextra 3 days ago

Lol

You're speculating what SpaceX balance sheet might be, like they haven't just released MRQ earnings report last week

Just go read it and you'll see you're wrong even after you subtract that 40 billion SPV https://www.sec.gov/Archives/edgar/data/1181412/000162828026...

[–] runako 3 days ago

Fair, I misread the filing.

Larger point stands. SpaceX is commanding a 62x sales multiple, whether or not you personally believe price:sales should be relevant. SpaceX's AI operation is smaller and growing slower than Anthropic's. It's reasonable to expect investors to benchmark Anthropic against SpaceX, it would be silly not to do so. A normal thing one would expect investors to do is assign a higher multiple to a company that grows faster.

[–] qwytw 3 days ago

But the question is not so much if they can IPO at those prices but rather if the valuations are sustainable over a couple of years. If they are priced to perfection there isn't much left for public investors besides huge risk that something might not work out 100% as expected.

[–] extraextra 3 days ago

Larger point doesn't stand, price/sales is as useful of a metric like measuring speed as mass/distance. "Yes, my speed is 100kg/10 meters".

Some people will benchmark Anthropic vs. SpaceX, that doesn't make it a smart approach.

A normal thing is to consider risk, liabilities, cashflow, how diversified revenue streams are etc., and other things which you seem to be missing.

I'm not trying to dissuade you from buying it. I'm just saying that the reasons you give are wrong.

[–] xvector 3 days ago

If your hyper growth startup does not have more liabilities than assets, it has fucked up.

[–] extraextra 3 days ago

Hahaha

Someone on a different forum fed the S-1 in Fable and it said "Shows a massive “loss” on paper, but that’s mostly an accounting effect from the company’s value going up"

Funniest shit I've read all day

[–] lotsofpulp 3 days ago

>Modern IPO's just reek of investors cashing out

99.9999% of the time someone sells something, the goal is to obtain cash. Throughout all of human history.

[–] somenameforme 2 days ago

Stock markets made a whole lot more sense before the internet and broad interconnectivity. It was really only one of the reliable ways for companies to broadly raise money to grow and expand. Now everything just feels like a mixture of gambling and pump and dump.

Like is there going to be anybody, whatsoever, who's genuinely aiming to go long on Anthropic? It just feels like this massive collusion that 'everybody' is in on where we all know it's going to crater but the whole game is to pump it as much as possible and just try not to be the last guy holding the bag.

Obviously LLMs are going to revolutionize the world, and they arguably already have, but there are open weight models available for free with frontier level performance, and the price to run these models keeps plummeting which, in turn, is already driving token costs down. Like many things now a days, this is all highly entertaining, yet absolutely insane.