Meta Launches $35bn Share Sale, Plans $60bn ATM

Meta Platforms launched about $35 billion of new stock offerings on Monday 26 October and said it plans to sell up to $60 billion more of a new class of shares from early next year. The company behind Facebook, Instagram and WhatsApp says the money will help it keep investing in AI.

The two offerings are around $22.5 billion of ordinary Class A shares and about $12.5 billion of a security that turns into shares in 2029, Meta said in its release. It also said Nvidia, AMD and Broadcom, three chipmakers whose products fill AI data centres, have shown interest in buying up to $5 billion of the shares between them.

In brief

Meta launched about $35bn of share offerings: $22.5bn of Class A stock sold through forward agreements and $12.5bn of mandatory convertible preferred shares.
It plans an at-the-market programme to sell up to $60bn of its new non-voting Class C stock, starting no earlier than the first quarter of 2027, but has not agreed its terms.
Nvidia, AMD and Broadcom have indicated interest in buying up to $5bn of the Class A shares, which is not binding.

How the $35 billion is built

The larger offering is $22.5 billion of Class A stock, but Meta will not get that cash straight away. It is using forward sale agreements with Morgan Stanley and Goldman Sachs. Banks borrow existing shares and sell them now; Meta then issues new shares to the banks later, and collects the money, on dates it chooses up to 19 November 2027, the prospectus says. Meta “does not expect to initially receive any proceeds”. The banks running the sale have an option to buy up to $3.375 billion more.

The second offering is 250 million depositary shares, each worth a twentieth of one share of Series A Mandatory Convertible Preferred Stock with a $1,000 liquidation preference. They pay a quarterly dividend and convert automatically into Meta stock on or about 15 August 2029, according to the filing. Meta intends to list them on Nasdaq as “METAM”. The dividend rate and conversion terms will be set at pricing, which had not happened at the time of the filings.

Both prospectuses say the money will go to “general corporate purposes”. Meta’s release puts the deals inside a wider plan to pay for AI through “a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital”. It expects capital expenditure of $135 billion to $145 billion in 2026. It generated $97 billion of cash from operations in the first nine months and held about $82 billion of cash and marketable securities at the end of September.

The $60 billion is a plan, not a sale

The bigger number is the least certain. Meta “plans to launch” an at-the-market (ATM) programme, in which a company drips new shares into the market over time, of up to $60 billion in Class C stock. That is the non-voting share class it announced with its third-quarter results, which will first reach investors as a one-for-one dividend once the change takes effect in January. The ATM is “not expected to commence until the first quarter of 2027”, and Meta says it “has not entered into any agreement” and that the “timing, size and terms” have not been determined.

Headlines putting the total at $95 billion, as CNBC did, add that planned $60 billion to the $35 billion launched on Monday. Meta’s release does not use a $95 billion figure. CNBC reported that the shares rose 1.6% in premarket trading.

The release also lists what the spending is for: four “superclusters” with more than one gigawatt of capacity each, including the Prometheus site in Ohio, and its Muse Wonder model. Meta says more than 10 million people in the US and Canada signed up to Muse in the early weeks, and it has since taken the Muse agent to Japan.

Selling shares adds a costlier source of money to Meta’s AI plan

Meta’s release says its Aa3/AA- credit ratings let it borrow “efficiently”, and calls the new equity “a complementary source of capital”. Selling stock on this scale is still a different signal: equity is usually the dearer way to raise money, because it hands a slice of future profits to new owners. The company’s own numbers show why it is reaching for it. In the third quarter, spending on infrastructure was larger than the cash its operations produced, leaving free cash flow negative, as TSN reported last week.

The dilution on Monday’s deal is modest. Using the $642.62 closing price from 23 October that the prospectus assumes, the $22.5 billion forward sale equals about 35 million Class A shares, roughly 1.6% of the 2.21 billion Class A shares outstanding at the end of September, before counting the convertible or the ATM. A full $60 billion ATM would be far bigger, and its effect may depend on where the Class C shares trade.

The chipmakers’ interest is the most circular piece. Nvidia GPUs and Broadcom networking chips sit inside Meta’s Prometheus cluster, and AMD also sells AI processors, so a combined $5 billion purchase would send some of the money that flows to suppliers back to Meta as equity. It is not binding, and the filing says any of them “may determine to purchase more, fewer, or no shares”. Other AI builders are leaning on debt instead, as SpaceX did with the $40 billion Elon Musk says it closed for GPUs.

The first hard test comes at pricing: the dividend rate Meta has to offer on METAM will show what investors charge to fund a $145 billion-a-year building programme.