Meta Wastes No Time
That didn’t take long. When Meta Platforms ($META) unveiled its new non-voting Class C shares alongside earnings last week, I noted that its filing showed management’s long-range plan needing to raise “hundreds of billions of dollars” beginning as early as this fall. The filing also said the company “expects to conduct offerings of Class C common stock from time to time.”
On Monday it got started. Meta is seeking to raise as much as $95 billion by selling common and preferred stock, per Bloomberg. About $35 billion is being offered now, roughly $22.5 billion in Class A common and the rest in mandatory convertible preferred. The remaining roughly $60 billion will come through an at-the-market program in the new Class C shares, which the Financial Times says is expected to begin in the first quarter of 2027.
Nvidia ($NVDA), Advanced Micro Devices ($AMD) and Broadcom ($AVGO), all Meta chip suppliers, have agreed to buy up to $5 billion of the common as cornerstone investors. Morgan Stanley and Goldman Sachs are leading the deal.
If fully executed, Meta’s raise would top Alphabet’s $90 billion June offering, which lead bookrunner JPMorgan called the “largest multi-tranche equity transaction in history,” per the FT. At about $654 a share, the full $95 billion is roughly 5.7% of Meta’s market value.
The timing fits what Meta’s special committee flagged in the filing: it wanted to front-run potential equity offerings from Alphabet ($GOOGL), SpaceX ($SPCX), Anthropic and OpenAI. Alphabet has raised once already, SpaceX completed the biggest-ever IPO in June, and Anthropic is expected to list before year-end, per the FT.
One wrinkle: because the Class C shares won’t exist until January, this first tranche is voting Class A stock. According to Claude, the $22.5 billion of Class A trims CEO Mark Zuckerberg’s voting control voting control only modestly, to about 60.2% from 60.6%, before any conversion of the preferred. The $60 billion ATM goes into the non-voting shares, so it won’t dilute his control at all.
It appears this was priced in by the market with Meta shares little changed as of 8:30 am ET.
At the time of publication, in terms of securities mentioned, Sethi was long META, NVDA, GOOGL, and SPCX and short AMD.