Meta launched about $35 billion of stock offerings Monday to finance its AI expansion, with much of the cash arriving later. Another proposed $60 billion program would wait until 2027 and sell shares without ordinary voting rights. Meta
The plan follows Meta’s move to create Class C shares, which would let it sell economic ownership without adding ordinary votes. Zuckerberg held approximately 60.6% of voting power on October 1, according to the company’s information statement. Statement
When Meta would receive the money
For the $22.5 billion common-stock offering, affiliates of Morgan Stanley and Goldman Sachs would borrow existing shares from other owners and sell them through underwriters. Meta expects no initial proceeds from those sales. Instead, it would deliver newly issued shares to the banks and receive payment when it settles the forward agreements, by November 19, 2027. Common
Meta can choose settlement dates within the agreements’ conditions. Its proceeds depend on an adjusted forward price, starting with the offering price less underwriting discounts. Financing rates and expected dividends can change that price. Delaying collection carries costs and adjustments. Common
The other offering consists of 250 million depositary shares, securities representing small pieces of preferred stock. Each represents one twentieth of a preferred share with a $1,000 liquidation preference, or $50 per depositary share. Multiplying 250 million by $50 reproduces the roughly $12.5 billion preferred component, before fees. A liquidation preference describes a contractual claim; it does not guarantee a trading price or repayment. Preferred
The preferred shares are designed to become common shares around August 15, 2029, unless converted earlier. Monday’s preliminary document leaves the dividend rate and conversion limits blank pending pricing. Investors cannot yet calculate a final dividend bill or exact share dilution. Preferred
Meta also proposes an at-the-market program, allowing stock sales over time at prevailing prices, for up to $60 billion. It expects that program after Class C shares begin trading, no earlier than the first quarter of 2027. Monday’s announcement says no agreement establishing it has been signed. Adding $35 billion and $60 billion describes contemplated financing, rather than cash already collected. Meta
More ownership can be sold without adding votes
Meta’s October 21 information statement provides for one Class C share for every existing Class A or Class B share, following a charter change scheduled to take effect January 19. The proportionate distribution would initially leave relative ownership unchanged. Statement
Selling additional shares afterward would leave existing investors with a smaller percentage of total shares, unless they bought more. Class C’s lack of ordinary votes lets Meta raise money without adding votes against Zuckerberg. Class A shares have one vote each; Class B shares have ten. The dividend and later capital raising have different effects. Statement
At Friday’s $642.62 closing price, $22.5 billion equals approximately 35.01 million shares, by calculation. This illustrates the offering’s size using a reference price. Monday’s public offering price was still blank, underwriting discounts reduce proceeds, and the Class C dividend changes how shares are counted and delivered. The final issue size remains undetermined. Common
The number of common shares delivered on conversion depends on a 20-trading-day price average and conversion limits set at pricing. Subject to conditions, holders would receive nonvoting Class C shares. Preferred
Capital spending exceeds quarterly operating cash
The urgency is visible in Meta’s third-quarter accounts. It generated $32.79 billion of operating cash and spent $34.91 billion on capital expenditures, including finance-lease principal. Subtracting those figures reproduces negative free cash flow of about $2.12 billion. Meta nevertheless ended September with $82.45 billion in cash, cash equivalents and marketable securities. It forecast $135 billion to $145 billion of capital spending for all of 2026. Results
Reported profit included a $9.89 billion charge tied to an agreement with state attorneys general. That accounting expense was recognized during the quarter, separately from the timing of cash payments. Results
A longer period gives a less strained picture. Meta’s quarterly filing records $96.873 billion of operating cash generation over nine months. Its funding requirements also extend well beyond one year: it disclosed $454.52 billion of non-cancelable commitments, with $121.41 billion due in 2027. Those commitments include cloud capacity, equipment, energy and consumer hardware. They are contractual spending schedules, not an amount that Monday’s stock offering immediately pays off. Filing
There is an operating case for the investment. Meta reported 26% quarterly revenue growth, with ad impressions rising 10% and average ad prices 14%. In an October 22 assessment quoted by Kiplinger, UBS analyst Stephen Ju expected AI investment to improve advertising and product adoption. He pointed to potential gains in targeting and recommendations. That assessment preceded Monday’s financing and represents a forecast, rather than measured returns from the new capital. Results Kiplinger
Nvidia, AMD and Broadcom have indicated interest in buying up to $5 billion of the common offering, according to Meta. Their interest is nonbinding, with no allocation disclosed. They would buy on the same price and terms as other investors. Meta
Nvidia announced a multiyear Meta partnership in February covering central processing units, networking and millions of Blackwell and Rubin graphics processors. Broadcom’s April agreement supports Meta’s custom AI chips and networking. If the suppliers buy shares, they would also become financiers of a customer expanding equipment purchases. Their announcements establish the commercial relationships; they do not establish that Monday’s contemplated investments have closed. Nvidia Broadcom
AMD’s relationship already includes equity running in the opposite direction. Its February securities filing granted Meta a warrant, a right to buy up to 160 million AMD shares at one cent apiece, subject to equipment-purchase milestones, AMD stock-price thresholds and other conditions. A binding initial commitment covered one gigawatt of AMD products; full warrant vesting depends on six gigawatts of purchases. Monday’s proposed Meta investment would be a separate transaction. AMD
At full vesting, exercising the right to buy 160 million AMD shares at one cent each would require $1.6 million in cash, calculated from AMD’s filing. That is the exercise payment, rather than the market value of the shares. AMD requires higher stock-price targets for successive tranches, reaching $600 for the final tranche. The arrangement links Meta’s possible ownership of its supplier to equipment purchases and share performance. AMD
Meta’s latest quarterly filing says it expects available funds and financing to cover its needs and will continue evaluating outside capital. Pricing the current offerings will reveal their immediate cost. Later filings will show when the forward sales settle, whether the Class C program starts selling stock and how much Meta actually receives. Filing
Common questions
Has Meta already raised $95 billion?
No. That sum combines current offerings with a proposed future program. Meta
When could the common-stock proceeds arrive?
Meta expects settlement by November 19, 2027, with timing subject to the agreements. Common
What does a $50 depositary share represent?
One twentieth of preferred stock carrying a $1,000 liquidation preference. Preferred
Is the preferred dividend rate known?
Monday’s preliminary prospectus leaves the rate blank pending pricing. Preferred
Does the Class C dividend itself reduce my ownership percentage?
A proportionate distribution preserves relative ownership. Subsequent sales can dilute it. Statement
Can new Class C holders vote in ordinary shareholder decisions?
Class C has no ordinary voting rights, subject to legal and charter exceptions. Statement
How is Meta’s negative quarterly free cash flow calculated?
Subtract $34.91 billion of capital spending from $32.79 billion of operating cash. Results
Have the three chipmakers committed to buy shares?
Their stated interest is nonbinding; final purchases can differ. Meta
Does Meta have to repay the preferred offering like an ordinary bond?
Its scheduled settlement is conversion into common shares, subject to its terms. Preferred
