Meta stock drops 7% on negative cash flow, AI spending surge — SkimNews
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- Meta reported negative free cash flow of $2.12 billion in Q3 while raising its full-year capex guidance to a range of $135 billion–$145 billion, up from $130 billion.
- Meta saw its shares fall nearly 7% on Thursday, with credit default swap spreads hitting record highs as investors signal growing concern over its AI-driven spending.
- Meta announced plans to create a new class of nonvoting Class C common stock to maintain founder control and support long-term growth financing.
- Mark Zuckerberg could leave California if the state's proposed 'Wealth Tax' passes, as it would trigger a multi-billion-dollar tax liability based on his stock ownership, according to an SEC filing.
- Meta generated $64.60 billion in revenue for Q3, up 26% year-over-year and slightly above analyst expectations of $63.37 billion, with earnings per share at $3.83.
Why it matters: Meta is prioritizing AI investment over short-term financial health, risking investor confidence as cash flow turns negative. The $10 billion capex increase and stock drop show markets are unsettled by the scale and pace of spending, even as revenue grows.
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