Meta to raise up to $95-billion in equity to fund costly AI expansion — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Meta plans to raise up to $95 billion through about $35 billion of public common and preferred stock offerings and a separate at-the-market program of up to $60 billion; terms and timing for the larger program have not been finalized.
- Nvidia, AMD and Broadcom have expressed up to $5 billion in combined interest in Meta’s Class A shares, adding to concern that chip suppliers are helping finance a major customer’s AI buildout.
- Meta shares fell about 1.4% in morning trading, while William Blair expects investors to continue to question the financing and the potential for future capital raises.
- Meta reported $2.12 billion in negative free cash flow in the third quarter, its first cash burn in more than a decade, versus $10.63 billion of positive free cash flow a year earlier.
- Meta raised the lower end of its annual capital-expenditure forecast to $135 billion to $145 billion and has committed about $825 billion to future spending, primarily on data centres, AI infrastructure and cloud-computing power.
- Meta plans to issue non-voting Class C common stock in January 2027, effectively creating a two-for-one split while preserving Mark Zuckerberg’s control and financing acquisitions and employee retention.
- Mark Zuckerberg’s Class C shares under Meta’s agreement can be sold to help pay a potential California billionaire wealth tax, with Zuckerberg committing to remain in California.
Why it matters: Meta’s suppliers are becoming financiers of their own demand: Nvidia, AMD and Broadcom expressed up to $5 billion in interest, while the company’s first negative free cash flow in over a decade makes the $95 billion raise central to its $135 billion-to-$145 billion annual capital-expenditure forecast.
Ask SkimNews
