Meta launched approximately $35 billion of common and preferred stock offerings on 26 October and plans a separate programme of approximately $60 billion to help finance AI infrastructure, according to its announcement distributed by PR Newswire. The second programme has yet to be established, while Meta expects capital expenditure of $135 billion to $145 billion in 2026.
Key points
- The offerings comprise approximately $22.5 billion of Class A common stock and $12.5 billion of depositary shares representing mandatory convertible preferred stock.
- Meta does not expect to receive proceeds initially from common shares sold by the forward purchasers.
- Nvidia, AMD and Broadcom have indicated non-binding interest in purchasing up to an aggregate of $5.0 billion of common stock, StreetInsider reported.
- Meta plans the approximately $60 billion Class C stock programme for when trading in those shares begins, but says it has made no agreement for it.
Meta splits $35 billion between two offerings
Meta is offering approximately $22.5 billion of Class A common stock through forward sale agreements and approximately $12.5 billion of depositary shares representing newly issued Series A Mandatory Convertible Preferred Stock. The offerings are concurrent but separate. Each of the 250,000,000 depositary shares represents a 1/20th interest in one preferred share.
Under the forward agreements, purchasers or their affiliates sell the common shares in the offering. Meta said it does not expect proceeds from those sales initially. It intends to receive proceeds when the agreements settle and to use them for general corporate purposes. Meta also intends to use the net proceeds of the depositary-share offering for general corporate purposes.
Meta expects to give the underwriters 30-day options to buy up to 37,500,000 additional depositary shares and up to another $3.375 billion of Class A common stock. The depositary-share option is solely to cover any over-allotments. If the common-share option is exercised, Meta expects to enter into additional forward sale agreements covering those shares.
Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are lead joint bookrunning managers, StreetInsider reported. The preferred stock has a liquidation preference of $1,000 per share. Meta intends to seek a Nasdaq Global Select Market listing for the depositary shares under the symbol METAM.
Nvidia, AMD and Broadcom indicate $5.0 billion interest
Nvidia, Advanced Micro Devices and Broadcom have each indicated non-binding interest in buying Class A common stock in the offering, up to an aggregate of $5.0 billion, according to StreetInsider. The indicated purchases would be at the same price and on the same terms as those of other buyers. Their interest is not a commitment to purchase the shares.
Meta said its planned investment will expand the infrastructure and compute capacity for its existing business and new AI products. It expects capital expenditure of $135 billion to $145 billion in 2026 and intends to fund investment through operating cash flow, investment-grade debt, partnerships and equity.
Over the first three quarters of 2026, Meta generated $97 billion in operating cash flow and ended the third quarter holding approximately $82 billion across marketable securities, cash and cash equivalents. It described the equity offerings as another source of funding alongside debt, for which it cited Aa3/AA- credit ratings.
Meta reported third-quarter revenue of $64.6 billion, up 26% from a year earlier, and net income of $9.9 billion. AI Affairs reported a 7% fall in Meta shares as AI spending pushed quarterly cash flow negative. It also reported the revenue growth alongside Zuckerberg’s Muse growth and cost target.
Class C programme awaits trading launch
Meta plans to launch an at-the-market programme of approximately $60 billion when its previously announced Class C common stock starts trading. Such a programme would allow shares to be sold over time rather than through the concurrent underwritten offerings. Meta said it has entered into no agreement for the programme and that its timing, size and terms have not been determined. It also said there is no assurance it will establish the programme or sell shares under it.
The programme is expected to begin in the first quarter of 2027. Meta’s financing plan therefore places the approximately $35 billion of launched offerings alongside a proposed source of capital whose establishment and eventual sales remain conditional.
Meta expects the forward sale agreements to settle on or before 19 November 2027.
