Meta upsizes AI stock sale, prices $25 billion of shares

Meta Platforms upsized its sale of Class A common stock to $25.0 billion from $22.5 billion and priced the shares at $625.00 each, the company said in a release posted early Tuesday. It also priced 250 million depositary shares at $50 each, representing a new 6.50% Series A mandatory convertible preferred stock.

The common stock was sold in connection with forward sale agreements covering 40 million Class A shares with Morgan Stanley Capital Services and Goldman Sachs & Co., according to the release. Meta does not initially receive cash from that sale. At an initial forward price of about $622.92 a share, it expects net proceeds before expenses of about $24.9 billion when the agreements settle, which it expects on or before Nov. 19, 2027, the release says. Underwriters have a 30-day option to buy up to $3.75 billion of additional Class A shares, up from the $3.375 billion described in Monday’s filings.

Net proceeds from the preferred offering will be about $12.5 billion, or about $14.3 billion if underwriters fully exercise a 30-day option to buy 37.5 million more depositary shares, after the underwriting discount and estimated expenses, Meta said. Both offerings are expected to close Oct. 29.

Meta launched the offerings Monday. Nvidia, Advanced Micro Devices and Broadcom had indicated interest in buying up to $5.0 billion of the Class A shares in aggregate, according to Meta’s Monday filings, which said those indications were not binding.

What’s driving it

Meta said in its Monday free writing prospectus that the offerings support “continued investment in AI infrastructure and personal superintelligence.” The company expects $135 billion to $145 billion of capital expenditures in 2026, according to that filing. It said it generated $97 billion of operating cash flow in the first three quarters of 2026 and had about $82 billion of cash, cash equivalents and marketable securities at the end of the third quarter.

Meta broke ground on its first custom-built data center in Prineville, Oregon, in 2010. In a 2021 post on its data centers site, the company said the Prineville campus, once completed, would have 11 buildings and nearly 4.6 million square feet, an investment of more than $2 billion.

Meta also plans a separate at-the-market program to sell about $60 billion of its planned Class C common stock. The company said Monday that it has no agreement for the program, that its terms have not been determined and that it does not expect the program to begin until the first quarter of 2027.

Why it matters

Meta raised the common stock sale by $2.5 billion at pricing, selling more than it first proposed. The two pieces work on different clocks. The preferred offering delivers cash when it closes, while the forward structure lets Meta collect the common stock proceeds later, on dates it chooses through November 2027. That lets the company line up equity funding for spending it has not yet made, without receiving all the money at once. For existing shareholders, the terms set the dilution math: 40 million new Class A shares on settlement, or 46 million if the option is fully used, plus preferred shares that will convert into between 1.3620 and 1.6000 Class A shares each around Aug. 15, 2029, depending on the stock price then, according to the release. The 6.50% dividend is a fixed cost Meta can pay in cash or stock. Whether the added shares pay off depends on returns from data centers still being built.

Who has a stake

Shareholders: New Class A shares and convertible preferred stock will add to the share count over time, under the terms in the release.

Preferred buyers: Holders receive a 6.50% annual dividend on a $1,000 liquidation preference, payable quarterly starting Feb. 15, 2027, when declared by Meta’s board, the release says.

Chipmakers: Nvidia, AMD and Broadcom indicated interest in up to $5.0 billion of the common stock, according to Monday’s filings.

Banks: Morgan Stanley and Goldman Sachs are lead joint bookrunning managers, and their affiliates are the forward purchasers, the release says.

What’s next

Both offerings are expected to close Oct. 29, subject to closing conditions, Meta said. The company has applied to list the depositary shares on the Nasdaq Global Select Market under the symbol “METAM.” Once Meta’s Class C stock is issued and other conditions are met, the preferred stock could convert into Class C shares instead, and the forward agreements could be settled in Class C stock, according to the release. The at-the-market program is not expected to begin until the first quarter of 2027.