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[–] [S] 5 points 4 days ago* (12 children)

GAAP metrics like “net loss” are sensationalist, what a claim lol. These are the only numbers that can’t be bullshitted.

Nothing to see here, please return your attention to Annualised Run Rate that we extrapolated out of 15 seconds at the end of February.

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  • [–] 6 points 4 days ago* (11 children)

    The overwhelming majority of the deficit—$94 billion of the $104 billion—comes from a non-cash accounting adjustment. Early investors like Amazon and Google backed Anthropic using convertible notes (debt that turns into equity). Because Anthropic's estimated valuation skyrocketed toward $1.5T–$2T ahead of its IPO, accounting rules (GAAP) require the company to recalculate the "fair value" of those liabilities. In short: Anthropic looks deep in the red because the company became massively more valuable.

    Manageable Operational Losses: When you strip out the funky non-cash accounting charges, Anthropic’s actual nine-month operating loss was only $1.26 billion. For a tech giant scaling this fast, an operating deficit of that size is well within normal territory.

    In essence, their actual operational losses, the ones that determine if we get to celebrate them closing down, are literally 1% of the headline.

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  • [–] [S] 1 point 4 days ago* (10 children)

    This is real money, hence it’s included in net PnL. All real companies have to count money like this for a reason. Isn’t Anthropic a real company?

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  • [–] 4 points 4 days ago (3 children)

    No, it's not real money. In this case, convertable notes are loans backed by stock. That's why the debt is valued so highly. The notes are still for the same amount of stock, but the value of that stock is inflated beyond reason. Either way, Anthropic is not on the hook for the cash value of the stock, just the stock itself.

    This debt is essentially noting that Anthropic does not own all of this stock on their books, but converting it into cash-value to do so. If someone were to buy the company, like via an IPO, it would be important for them to understand how much of the comapny's valuation is actually owned by the company vs other entities.

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  • [–] [S] 2 points 4 days ago* (last edited 4 days ago) (2 children)

    You can’t eat cake and have it too.

    If Anthropic doesn’t own all stock they owe others they’ll have to buy it in the market. If it’s overvalued they’ll have to buy it at a price that will result in losses. If it’s not going to be overvalued then that means that anyone who buys into Anthropic on or after IPO is losing money. Not a good value proposition for buying Anthropic stock, no? And then there’s that $900bn of non-cancellable commitments.

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  • [–] 3 points 4 days ago* (last edited 4 days ago) (1 child)

    They don't have to buy their own stock on the market. They can just not sell it in the first place.

    If the stock drops in price, the value of the stock they owe will also drop in price. So, in that scenario they will not have $900B of commitments. But it's the same amount of stock.

    If I own 10 apples and owe you 5, it doesn't matter if tomorrow apples cost $50 Trillion then 50 cents the next. I still owe you 5 apples either way, and I have plenty of apples to cover that debt to you regardless of how much the grocery store is selling them for.

    Side note: plenty of IPOs are terrible investments a lose everyone money. They are risky investments.

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  • [–] [S] 0 points 4 days ago

    If a convertible note is redeemed in stock, where does the stock come from? Air?

    What does the stock price have to do with their $900b commitments to buy products and services from other companies? My creditors don’t care how well I’m doing if I signed contracts. Revenue growth is slowing so how are they going to cover it while bringing loss after loss and their best idea for business is to lose money even faster?

    The price of the apple matters because Anthropic is making claims how much they’re worth, based on how well they’re business is doing. If apples are overvalued then everyone is overstating that. And that means the business isn’t doing all that well. Hence, can’t have cake and it eat too.

    There’s a reason derivative instrument valuation goes into PnL. It’s not even like counting nominal value of an option contract without physical delivery that some use to exaggerate value of such contracts, these are vanilla convertibles which can explode in their face in multiple ways.

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  • [–] 2 points 4 days ago (5 children)

    It is literally not real money. It is the value of shares that anthropic owes to its lenders. In the event its market value crashes, so does the majority of that debt.

    These notes can eventually convert into company shares. Anthropic's valuation increases dramatically. The value of the investors' conversion rights increases too. Accounting rules require Anthropic to recognise that increase as an expense. In other words, Anthropic's rising valuation can actually create a reported accounting loss. An important distinction: This is not necessarily money leaving Anthropic's bank account. It is a non-cash accounting adjustment reflecting the increased value of financial obligations tied to future shares. Think of it this way: You borrow money and agree that the lender can convert the debt into shares in your business. Your business becomes much more valuable. Those conversion rights become more valuable to the lender. You now have a larger accounting liability, even though you haven't paid the lender anything extra in cash. That's broadly what happened.

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  • [–] [S] 1 point 4 days ago (4 children)

    So derivative instruments are not real? You need to tell that to Lehman Brothers accountants. You could have prevented 2008 GFC! xD

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  • [–] 1 point 4 days ago (3 children)

    I've been providing actual information. Would you care to explain why this is a bad thing for anthropic and how this might lead to their bankruptcy? Or are we just here to echo chamber?

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  • [–] [S] 1 point 4 days ago (2 children)

    I think things are bad because Anthropic posted an over 100bn net loss per GAAP accounting standards. I think GAAP is cool because if you lie about anything that GAAP covers you go to jail. But maybe accountants didn’t know what they were doing when they agreeing upon those rules. Idk, man, maybe this company is just wildly unprofitable and the biggest missalocation of resources in the history of mankind?

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