Commentary: FOMO on mega IPOs like Anthropic? Read the filing, not the hype

Commentary Anthropic’s upcoming IPO could fuel FOMO for many investors but excitement over a company’s prospects should not overshadow the fundamentals of investing, says Chez Anbu, head of wealth advisory at OCBC. FILE PHOTO: Anthropic logo and stock graphs in this illustration taken on October 26, 2026. REUTERS/Dado Ruvic/Illustration/File Photo New: You can now listen to articles. This audio is generated by an AI tool. SINGAPORE: These days, an outsized initial public offering (IPO) can generate so much buzz that it feels like an immediate deadline for investors to decide whether they want to be part of its future.It is easy to claim to be a rational investor until your friends start sharing news articles or updates that they’ve subscribed for an IPO. Instead of asking whether the investment makes sense for your portfolio, you start wondering what you might be missing.This is the fear of missing out, or FOMO.As Anthropic’s IPO comes closer into view following SpaceX’s blockbuster listing earlier this year, such struggles may again become real for many investors. But amid the “mega FOMO” created by mega IPOs, the basics of investing do not change. THE ENTHUSIASM AROUND MEGA IPOSThe SpaceX listing showed how quickly enthusiasm can build around a company associated with a future technology. On its first day of listing, trading in its shares was the second largest by volume in the United States.Interest was notable even in Singapore. Enquiries about US stocks among our clients more than doubled, while our client advisors reported heightened interest in SpaceX. Some clients subsequently gained exposure through direct shares and structured products.Anthropic’s forthcoming IPO – with Nov 19 floated as a possible date – could generate similar interest. The Claude chatbot creator is reportedly targeting a valuation of up to US$1.4 trillion in its IPO and raising up to US$64 billion with shares priced between US$70 and US$78 each. The target valuation marks one of the biggest Wall Street debuts of all time but falls short of the US$1.77 trillion record SpaceX set in June and earlier investors’ expectations of US$2 trillion.Notwithstanding the recent brutal tech selloff, Anthropic could still be enticing for some investors given how its Claude model is used widely by individuals, businesses and government agencies. In Singapore, Anthropic recently opened an office and signed an agreement with the government covering AI safety and responsible adoption. These may make the company unusually tangible for some investors. That familiarity may also lead investors to assume that Anthropic can be one of the long-term winners of the AI boom. A PROMISING TECHNOLOGY DOES NOT MEAN A WINNING INVESTMENTHowever, familiarity with a product is not the same as understanding the investment.The history of technology revolutions is filled with names that pioneered important breakthroughs, but did not capture most of the value created subsequently.Netscape helped commercialise the internet browser before losing ground to Microsoft. AltaVista was an early leader in internet search, but Google ultimately built the stronger business. There have also been many hyped-up IPOs in the past, from Facebook to Alibaba. While the former became one of the great long-term winners, investor confidence in Alibaba ultimately fluctuated following its 2014 debut.The lesson here is that technological leadership does not guarantee durable commercial leadership. Even an outstanding company can be a poor investment, if too much future success is already reflected in its valuation.The same uncertainty applies to generative AI. No one knows whether today’s leaders will retain their positions as competitors improve, prices fall and customers become more willing to switch. Already, there are concerns over the durability, financing and returns of investments into the wider AI sector, alongside the technology’s “existential risks to humanity" raised by Anthropic itself.Investors should therefore distinguish between confidence in a certain theme, and confidence in a single company at a single valuation. READ THE FILING, NOT THE EXCITEMENTTo return to the basics, understand what you are investing in, and why. Investors should do their research or seek qualified advice on the investment, its risks and how it fits within their portfolios.Investors should also recognise their biases. Hype can make us underestimate risks, while availability bias can draw us towards an investment because it dominates the headlines, or because we use its products.In the case of mega IPOs, the fundamentals of the IPO filing are of particular importance. Everyday investors do not need to master every technical detail, but they should be mindful of the company’s revenue growth, operating expenses, spending commitments and governance.For example, while the third-quarter revenue for Anthropic rose to about US$17 billion, this was much slower than the 144 per cent growth in the second quarter. Meanwhile, operating expenses increased to US$17.5 billion - a quarter-on-quarter increase of 42.6 per cent - while the adjusted operating margin narrowed from 19 per cent in the previous quarter to 15 per cent. The filing also disclosed approximately US$895 billion of committed spending, substantially related to computing infrastructure. This supports future growth, but creates a significant obligation if demand slows, prices fall or financing becomes harder to obtain.Furthermore, Anthropic’s seven co-founders hold 50.1 per cent of the voting power. Public investors may share in the company’s economic success, but they will have limited influence over important decisions.These factors do not automatically dictate the attractiveness of the IPO. Still, they are crucial in clarifying what investors are buying, and the risks they are accepting. COUNT THE EXPOSURE YOU ALREADY OWNInvestors should also ask how much exposure to the same theme already sits inside their portfolios.A US index fund, a global technology fund and a semiconductor-linked structured note may look like separate investments, yet all three could depend on the same AI investment cycle. Buying Anthropic may therefore increase a concentration that is not immediately visible.Currency risk also matters. An investment can rise in US-dollar terms, but deliver a weaker return when converted into Singapore dollars. A big name does not remove the usual risks of investing overseas.And in case investors still feel swept up in the hype, the SpaceX experience is worth remembering.Shares initially offered at US$135 quickly rose above US$225, before falling to about US$153 by Jun 26 - meaning someone who chased the early peak was down roughly a third within weeks. Ultimately, the price you pay can make a considerable difference in the profitability of your investment.Missing an IPO also does not mean losing access to the company. Investors will still be able to participate later through shares, funds or structured investments, each with its own costs and risks.The future of a company with potential for huge societal impact may be worth investing in but that does not mean investors should pay just any price for a place in it.Chez Anbu is head of wealth advisory at OCBC.