Oct 28 : Prediction markets are seeing massive trades for Anthropic contracts after the AI giant's IPO filing, even as retail stock traders await the official opening bell likely next month.
The binary "yes" or "no" bets in prediction markets are influencing the way retail investors speculate on high-profile IPOs, allowing traders to wager on aspects such as the closing prices and its listing venue without the need to buy shares.
"Prediction market interest in Anthropic's IPO is the financial equivalent of people lining up outside the Apple Store before a new iPhone release," said Michael Ashley Schulman, a partner at wealth management and financial advisory firm Cerity Partners.
Earlier this week, Anthropic took a major step toward going public by unveiling its IPO filing. The listing could value the AI lab behind the Claude models at between $1.5 trillion and $2 trillion, Reuters has reported.
On Polymarket, more than a dozen markets have sprung up around the IPO, where traders are placing bets on its fundraising haul, listing exchange and debut valuation.
Rival Kalshi is also drawing bets on everything from which bank will lead the offering to which sector index providers will classify Anthropic in. Combined, the markets have attracted tens of millions of dollars in volume.
"It is a healthy sign of robust interest and the wagers placed may help the market zero in on its eventual public market opening price," said Schulman.
Prediction markets allow users to buy and sell contracts tied to the outcome of real-life events, with prices fluctuating as traders weigh the odds of the different outcomes.
Once largely tied to politics and economic data, the platforms are increasingly moving into traditional Wall Street turf, offering tens of thousands of markets on stock moves, company data and other corporate events that often drive shares, Reuters reported last month.
IPO investing, however, has long been dominated by deep-pocketed institutional investors. Although retail participation has expanded in recent years, including around Elon Musk's SpaceX listing, issuers still allocate only a small portion of offerings to individual investors.
"The Anthropic IPO is going to be a crucial litmus test about both individual and institutional investors' appetite for AI," said Steve Sosnick, chief strategist at Interactive Brokers.
The Polymarket contract on the timing of Anthropic's IPO had drawn $6 million in trading volume as of 9:30 a.m. ET (1330 GMT) on October 28. A separate market on the AI company's closing market capitalization had attracted about $3 million.
"Prediction markets are clearly becoming an integral part of many investors' approach to financial risk management and speculation," Sosnick said.