Today's news that Anthropic is targeting a $2 Trillion IPO valuation got me thinking... The most promising companies in the world used to come public when valuations still had 10x, 50x, 100x or more growth potential. That’s no longer the case in most cases… If Anthropic's IPO valuation is $2T, they will need to grow to $20 Trillion to reach ‘just’ a 10x and that’s assuming no dilution, which we all should know likely won’t be the case. For perspective, $20T is nearly 4x the largest company in the world today. How does this make the wealth divide get even wider than it already is? The uber wealthy are funding the best-of-the-best private companies, getting substantial equity in the process, but only until the risk/reward no longer makes sense. It’s at that point these companies come public, resulting in everyday investors providing the exit-liquidity for pre-IPO investors & insiders. Rinse/Repeat hundreds of times over and wealth divide grows exponentially! Some won’t agree with me and that’s fine, but nothing good will come from an even wider wealth divide in the U.S. and world for that matter. “Power corrupts and absolute power corrupts absolutely” and there’s no greater power than money, with the possible exception of blackmail, but that’s a story for another day…
246 views
3 Comments
Satwinder Singh@thevalueinvestor · 4hEdited
For me valuations are one thing and they definitely don’t make much sense right now. But I think the bigger concern is the political environment and the impact it is having. I think this is a big part of why our politics is becoming more extreme these days. When people are living paycheque to paycheque and struggling to get by, they become much more likely to believe anyone promising even a small improvement in their lives, even if those promises are unrealistic or unlikely to ever happen. On the other hand, the ultra wealthy can have an enormous influence on politics by donating staggering amounts of money and supporting politicians who will advance their interests and policies. It creates a vicious cycle, people at the bottom become more frustrated and angry while those at the top gain even more wealth and influence. The divide keeps getting wider and politics becomes increasingly polarized.
ETF Go@etf.go · 4h
Math is math 👍
See the full comment section 👀Sign up for the full Blossom experience!
