Five days after its finance chief told analysts there was no financing plan to announce, Meta Platforms put one on the table worth up to $95 billion. The first $35 billion of stock offerings launched Monday morning, and Nvidia, Advanced Micro Devices and Broadcom have signaled they may buy as much as $5 billion of it between them, though nothing is committed.
The plan, laid out in a press release filed with the SEC, pairs about $22.5 billion of Class A common stock with about $12.5 billion of depositary shares tied to a new mandatory convertible preferred stock. Another $60 billion would come later through an at-the-market program selling the nonvoting Class C shares Meta created alongside its third-quarter results. That program isn’t expected to start until the first quarter of 2027, and Meta said it has not signed an agreement for it yet.
On Wednesday’s earnings call, CFO Susan Li said, “We don’t have any specific financing plans to announce at this time,” and described the new share class as a way to reach “a diverse pool of funding sources.” WebProNews covered that Class C setup last week.
Chipmakers on the buying side
The interest from Nvidia, AMD and Broadcom is an indication, and the common stock prospectus says it isn’t binding. Any of the three could buy more, fewer or no shares, and they would pay the same price as everyone else. The $5 billion is a combined ceiling, not a per-company figure.
Meta won’t receive cash right away from the common stock. Those shares are sold through forward sale agreements with Morgan Stanley and Goldman Sachs, and Meta collects when it settles them, on dates it picks through Nov. 19, 2027. The prospectus runs its math off Friday’s closing price of $642.62. At that price, $22.5 billion buys roughly 35 million shares, about 1.6% of the 2.21 billion Class A shares outstanding at the end of September. Until settlement, swings in the contracts’ fair value could cause “significant volatility in our reported financial results,” Meta warned.
The preferred piece is 250 million depositary shares, each a 1/20th interest in a preferred share with a $1,000 liquidation preference. They convert automatically around Aug. 15, 2029, into Class A stock, or into Class C once that class exists. Meta plans to list them on Nasdaq as METAM.
Where all that money goes
Meta expects $135 billion to $145 billion of capital spending this year. It generated $97 billion of operating cash flow in the first nine months and held about $82 billion in cash and marketable securities at the end of September. The company called the equity “a complementary source of capital” to investment-grade debt, noting that its Aa3/AA- ratings let it borrow efficiently. Elon Musk said Sunday that debt markets had closed to AI-only companies after SpaceX finished its own $40 billion GPU financing.
For business customers, the release points to a Meta Enterprise Platform meant to serve “high-margin inference demand,” with models such as Muse Wonder supporting its API and Muse Code. More than 2 million businesses use its Business Agent each week, Meta said.
Meta shares were up 1.6% in premarket trading after the announcement, CNBC reported.
from WebProNews https://ift.tt/W1rCVFI
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