“Dean of Valuation” Professor Aswath Damodaran criticized Anthropic PBC’s governance structure ahead of its IPO, calling its voting-share design “deviously self-serving” and saying it “would put Kim Jong Un to shame.”
Damodaran Targets Voting Power
Damodaran, a professor of finance at New York University’s Stern School of Business, said Anthropic’s five share classes and governance arrangements leave public shareholders with limited influence over the company.
He said Anthropic’s Class A shares carry standard voting rights, but argued that the broader structure, including founder control of 50.1% of voting power and the Long-Term Benefit Trust’s role in selecting directors, “effectively emasculates public investors.”
Anthropic’s S-1 states that its Class F common stock, held by an entity controlled by co-founders, will carry 50.1% of total voting power on matters submitted generally to stockholders. The filing also says the Long-Term Benefit Trust generally has authority to elect and remove Class T directors, who will constitute a majority of the authorized board.
Damodaran said he owns shares in other companies with dual-class structures, including Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Meta Platforms Inc. (NASDAQ:META), and does not automatically rule out investing in companies that preserve founder control.
“But,” he wrote, Anthropic had gone further through the combination of its public benefit corporation structure and voting design, which he described as being “so deviously self-serving that it would put Kim Jong Un to shame.”
Governance Could Affect His Valuation
Damodaran estimated Anthropic’s equity value at $1.475 trillion under his base-case assumptions, compared with what he described as an IPO pricing range of $1.5 trillion to $2 trillion.
He said that if Anthropic is priced “well above” his roughly $1.48 trillion estimate, he would “sit out the frenzy.”
Damodaran added that Anthropic’s “public benefit facade and the voting rights abuse” would require a “much larger discount” to his valuation before he would consider the shares attractive.
Ives Sees Appetite Near $1.5 Trillion
Yorkville Ives’ Dan Ives has taken a more constructive view of Anthropic’s prospective valuation, saying he expects “strong appetite” if the IPO is priced around $1.5 trillion.
However, Ives said he would not be an “assertive buyer” at a $2 trillion valuation, but added that he would be “definitely a buyer coming out” of the IPO depending on where it ultimately prices.
His comments put the valuation debate alongside Damodaran’s estimate of about $1.48 trillion, even as Damodaran argues Anthropic’s governance structure warrants a larger discount.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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