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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 26, 2026, 2:54 PM
    For anyone trying to interpret Anthropic's S1 - the "Change in fair value of convertible notes, etc" line with the $72B loss as of June 2026? That's "we have given out a lot of options and the value of our shares have increased and hence these options are now worth more". No "actual" money has been lost here.

    It's not nothing (as a prospective shareholder you should be very much worried about dilution!) but their actual cash and asset loss over the period is ~€8B

    On the operating side they are/were actually very close to profitability, though whether that holds with their recent price cuts is another matter!
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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 26, 2026, 3:02 PM
    @gsuberland everything on that line is "the value of the debt we have issued has gone up", and as they say in footnote 2 this is mostly driven by an increase in the fair market value of Anthropic shares
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  • 💙🩷💜 Brett [backup account]brettm@swarm.coiloptic.org
    Oct 26, 2026, 11:34 PM
    @erincandescent@erincandescent.net but the money has been lost. they will have to pay out those options down the track. like if i owed you $100 that i have to give you in 2 years or whatever, and now things have changed and i now owe you $200 instead, that's an extra $100 i lost. in terms of my wallet it makes not difference that extra $100 is paid to you or (eg) paid to some server manufacturer, it just shows up as a different item on the account books.
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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 26, 2026, 11:39 PM

    @brettm The options are denominated in Anthropic shares. Anthropic fully has the ability to just print more shares, and they only need to print as many additional shares as they always did. Yes, Anthropic has due to circumstances (namely their own valuation increasing) acquired, over the last 6 months, a $72B liability, but they do not have to repay that liability with money or assets but instead with equity.

    The only money that has been lost is that Anthropic would have otherwise hypothetically had the option of selling that same number of shares for $72B more money.

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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 27, 2026, 12:53 AM
    @brettm they're not printing more shares. They're printing **the exact same number of shares**. The set of shares that they will at some point print has increased in value by $72 billion. This means the value of their liability has increased by $72b, and this appears as a loss on their P&L sheet.
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  • 💙🩷💜 Brett [backup account]brettm@swarm.coiloptic.org
    Oct 27, 2026, 1:09 AM
    omg yes their LIABILITY has increased by $72 billion. Liability means "money they owe other people."

    Money they owe other people + $72billion
    Loss from operations + $8billion
    ----------------------------------------Total loss this period $80billion

    You don't need to explain accounting 101 to me, I have a master's in accounting and I used to do financial reporting for broker-dealers in NYC. And I am telling you you do not get it.

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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 27, 2026, 1:18 AM

    @brettm Surely if you understand accounting you should understand that “Change in fair value of convertible
    notes, derivative liabilities, and SAFEs” means “Our existing liabilites changed in value”, and should especially be able to understand the footnote that “these numbers are primarily driven by an increase in our valuation”

    Now I don’t think this is exactly a healthy P&L sheet and in fact I would say it probably means they have taken out loans on terms that are rather suboptimal for them, but they are not going to be searching for $72b in cash to cover this.

    Image attached toot
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  • erincandescent ⎔erincandescent@erincandescent.net
    Oct 27, 2026, 1:35 AM

    @brettm If am a company and I owe you $100 and 100 of my own shares, and the market value of those 100 shares goes from $1 to $10 each, I still owe you $100 and 100 of my own shares even if the paper value of that liability has gone up by $900, and I can still issue those 100 shares for the same administrative fee.

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