Meta expands financing with non-voting shares and raises minimum spending forecast to $135 billion
Key Facts
Meta approved the creation of non-voting Class C common shares and the distribution of one share for each outstanding Class A and Class B share, expanding its financing options while preserving shareholders’ current voting power. The board approved an amendment to the charter on October 19, 2026, then shareholders holding a majority of the voting power approved it by written consent on October 20, according to a filing with the U.S. Securities and Exchange Commission. The company said the new shares could be used to raise capital, compensate employees, finance acquisitions and for other corporate purposes. It said their issuance would not dilute the voting power of Class A and Class B holders. The move comes as the company expands its AI investments and its financing needs tied to infrastructure grow.
Meta expects the Class A share price to reflect the effect of a two-for-one stock split after the distribution, and intends to list Class C shares on Nasdaq when they are issued. The distribution means adding one non-voting share for each outstanding Class A and Class B share, while voting rights remain with the existing classes. Chief Financial Officer Susan Li said the new class “will expand our financing tools and give us flexibility to invest.” This will allow the company to use shares among the financing, compensation and acquisition options it cited in its filing. Meta has not yet set the shareholder record and distribution dates, saying the board will announce them later. The distribution is due to be paid no later than the fifth business day after the amended charter takes effect.
Alongside the change to its share structure, Meta raised the lower end of its 2026 capital spending forecast to $135 billion from $130 billion, while keeping the upper end at $145 billion. The revision raises the floor of the previous $130–145 billion range, not its ceiling. The company said its spending supports AI efforts and its core business as the cost of building the infrastructure needed to expand rises. The forecast spending coincided with strong quarterly revenue growth: third-quarter revenue rose 26% to $64.60 billion from $51.24 billion in the same period of 2025. Revenue topped analysts’ average estimate of $63.34 billion, according to the Associated Press.
Meta set a fourth-quarter revenue range of $73 billion to $76 billion, while analysts’ average estimate was $73.65 billion, below the midpoint of the company’s range. On other investments, the company expects losses at its Reality Labs unit to narrow to about $15 billion in 2027 as it shifts investment to other areas, mainly AI. Meta did not provide revenue guidance for 2027. That puts the coming outlook in the context of a shift in investment toward AI, while the unit’s results and losses remain part of the broader spending picture. Fourth-quarter revenue remains the next financial milestone the company identified in its filing.
Meta shares fell in the October 22 session amid investor concerns about the cost of expanding in AI. Reuters said the stock fell more than 7% that day, while other coverage described the decline as 8%, its biggest since July. The stock closed at $709.33 on October 16, then $705.44 on October 19 and $694.25 on October 20. The close rose to $697.52 on October 21 before falling to $648.85 on October 22. The cost of insuring the company’s debt against default also reached a record, according to Reuters, as investors weighed business growth against spending costs.