Meta launches share offerings worth about US$35 billion amid AI spending
Chip suppliers Nvidia, AMD and Broadcom have expressed nonbinding interest in buying up to US$5 billion of the common stock, Meta said.
Meta has launched two stock offerings valued at about US$35 billion as it seeks financing for rising artificial intelligence spending. The company said the proceeds would go toward general corporate purposes.
The larger transaction involves US$22.5 billion in Class A common stock through forward sale agreements. These arrangements defer delivery of the shares and payment until no later than 19 November 2027. Meta does not expect an initial cash payment from this sale.
A second offering comprises about US$12.5 billion in mandatory convertible preferred stock, which pays dividends and is due to become common stock around 15 August 2029. The dividend rate will be determined when the offering is priced.
Morgan Stanley and Goldman Sachs are managing the transactions. Within 30 days, banks have options to purchase an additional US$3.375 billion in common stock and 37.5 million preferred shares. Meta said Nvidia, AMD and Broadcom had collectively indicated interest in purchasing up to US$5 billion in common stock, but had made no binding commitment.
Separately, Meta plans open-market sales of about US$60 billion in nonvoting Class C shares beginning in early 2027. The company has yet to sign an agreement for that program.
Meta expects capital spending of US$135 billion to US$145 billion this year, chiefly for data centers and chips. Its free cash flow became negative in the third quarter as spending increased.
According to Investing.com, Meta generated US$97 billion in operating cash during the year's first nine months. It had about US$82 billion in cash and securities at September's end.
Meta's stock dropped as much as 4% before reversing course to trade about 1% higher.
