Meta launches $35 billion stock offering to fund AI push

Meta Platforms ↘ 1.88% launched public offerings of about $35 billion in common stock and convertible preferred stock on Monday, October 26, to pay for its AI expansion, Reuters reported. The company also plans a separate at-the-market share sale program of up to $60 billion once its new non-voting Class C shares begin trading, which is expected in the first quarter of 2027. Combined, the plans could raise up to $95 billion for AI infrastructure and what Meta calls "personal superintelligence."economictimes.com+1

How the deal is built

The company's announcement splits the offering into two parts. The first is about $22.5 billion of Class A common stock sold through forward sale agreements with Morgan Stanley ↗ 2.23% and Goldman Sachs The Goldman Sachs Group, Inc. ↗ 2.01%. The second is about $12.5 billion in depositary shares representing mandatory convertible preferred stock. The preferred shares will convert automatically on or about August 15, 2029, and could convert into Class C stock once that class exists. Meta said it has not yet signed any agreement for the $60 billion program, and its timing, size and terms have not been set.stocktitan.net

Because of the forward structure, Meta will not receive the common-stock proceeds right away. It will deliver the shares and collect the cash on or before November 19, 2027. Meta said chipmakers Nvidia ↗ 2.39%, Advanced Micro Devices ↗ 2.80% and Broadcom ↗ 2.33% have expressed interest in buying up to $5 billion of the Class A shares. The company stressed that these indications are not binding commitments.en.sedaily.com+2

Spending pressure and investor reaction

The fundraising comes as Meta spends more on data centers and computing capacity to compete with OpenAI and Anthropic. As of September 30, Meta had $82.45 billion in cash, cash equivalents and marketable securities, slightly more than its $80.92 billion in long-term debt, according to Reuters. The company has about $825 billion in future spending commitments.economictimes.com

Meta shares were volatile in early trading after the announcement. According to Investing.com, the stock first fell and then turned higher.uk.finance.yahoo.com+1

Protecting Zuckerberg's control

The non-voting Class C shares, which Meta announced on October 21, let the company sell large amounts of stock without diluting Mark Zuckerberg's voting power. A company statement cited by Stock Titan said the structure "will allow the Company to raise critical equity capital without impacting Mr. Zuckerberg's voting power." This is a reversal for a company that spent $148.6 billion buying back its own stock from 2021 to 2025. Meta argued that its AI investments are already producing "tangible returns" through higher user engagement and better ad monetization.stocktitan.net+1