Meta launched two stock offerings worth about $35 billion on Monday to help pay for its AI spending, according to prospectus filings with the Securities and Exchange Commission. The package pairs $22.5 billion of Class A common stock with roughly $12.5 billion of mandatory convertible preferred stock, and Meta said it plans a separate share-sale program of up to $60 billion next year.
Three of Meta's main chip suppliers may buy in. Nvidia, AMD and Broadcom have indicated interest in buying up to an aggregate $5 billion of the Class A common stock on the same terms as other buyers, according to the filings. Meta described those indications as non-binding, so the chipmakers could end up buying less or none at all.
The common stock is structured through forward sale agreements with Morgan Stanley and Goldman Sachs, which are also running both offerings as lead bookrunners. Affiliates of the two banks borrow and sell the shares now, while Meta issues shares to settle the agreements and collects the cash later, on dates it chooses no later than November 19, 2027. As a result, Meta said it does not expect to receive proceeds from the common stock sale at first. Underwriters have a 30-day option to buy up to $3.375 billion more, which would lift the common offering to $25.875 billion.
Key facts
- 01Meta launched about $35B in offerings on Oct. 26: $22.5B of Class A common stock and about $12.5B of mandatory convertible preferred.
- 02Nvidia, AMD and Broadcom indicated non-binding interest in buying up to $5B of the Class A shares.
- 03The common stock is sold via forward agreements Meta can settle on or before November 19, 2027.
- 04Meta plans a separate at-the-market program of up to $60B in nonvoting Class C stock starting in Q1 2027.
- 05Meta guides 2026 capex to $135B-$145B and burned $2.12B of free cash flow in Q3, its first negative quarter in over a decade.
The preferred piece consists of 250 million depositary shares, each representing a one-twentieth interest in a share of Series A Mandatory Convertible Preferred Stock with an expected $1,000 liquidation preference. The shares pay a dividend, with the rate set at pricing, and convert automatically into common stock on or about August 15, 2029. Meta intends to list the depositary shares on Nasdaq under the ticker METAM, and underwriters can buy up to 37.5 million more.
The planned $60 billion at-the-market program would sell Meta's new nonvoting Class C shares. Meta's board declared a dividend on October 19 of one Class C share for every outstanding Class A and Class B share, and the amended charter creating the class takes effect January 19, 2027. Meta expects the program to start in the first quarter of 2027, once Class C begins trading, but it has not signed any agreement and said in its filing there is "no assurance" the program will be established on the terms described, or at all.
The size of the raise tracks the size of the spending. Meta guides 2026 capital expenditures to $135 billion to $145 billion, after raising the low end from $130 billion, mostly for data centers and chips. The company has committed to about $825 billion in future spending, mainly on data centers, AI infrastructure and cloud computing, including CoreWeave compute deals now worth $35 billion in total.
That spending has outrun Meta's cash generation for the first time in more than a decade. The company burned $2.12 billion in the third quarter, its first negative free cash flow in over ten years, compared with positive free cash flow of $10.63 billion a year earlier. Meta ended September with $82.45 billion in cash, cash equivalents and marketable securities, against $80.92 billion of long-term debt.
The core business is still growing. Meta reported third-quarter revenue of $64.60 billion, above the Wall Street estimate of $63.37 billion, and projected fourth-quarter revenue of $73 billion to $76 billion. It generated about $97 billion in operating cash flow in the first nine months of 2026. The spending also supports AI products such as Muse, the agent Meta launched in September, as it competes with OpenAI and Anthropic.
Meta said proceeds from the preferred offering, and from eventual settlement of the forward agreements, will go to general corporate purposes. The two underwritten offerings are not conditioned on each other, and the planned Class C program is not conditioned on either of them.
Meta shares fell as much as 4% on Monday before recovering to trade about 1% higher. The stock last closed at $642.62 on October 23, with about 2.21 billion Class A shares outstanding before the offering.
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