Meta Platforms plans to sell up to $95bn of shares to pay for its artificial intelligence infrastructure, the largest equity raise in the company's history.
About $35bn has been launched as underwritten offerings of Class A shares and of depositary shares tied to mandatory convertible preferred stock. Up to $60bn more will follow through an at-the-market programme of new non-voting Class C shares, expected to begin in the first quarter of 2027; Meta said timing and terms were not final. Nvidia, AMD and Broadcom have reportedly expressed interest in buying up to $5bn of Class A shares between them.
Spending outruns cash
The raise follows third-quarter results in which Meta reported negative free cash flow of $2.12bn, its first shortfall in more than a decade, against a positive $10.63bn a year earlier. The company expects capital spending of $135bn to $145bn this year and is building four data centre "superclusters", each with more than one gigawatt of capacity. Reuters puts its future spending commitments at about $825bn.
At the end of September Meta held $82.45bn in cash, cash equivalents and marketable securities, against $80.92bn of long-term debt. The company says it will fund its plans through operating cash flow, investment-grade debt, partnerships and equity. Alphabet sold $84.75bn of equity in June.
Investors weigh the bill
"We expect investors to continue to question the financing and potential for future capital raises," analysts at William Blair wrote. Meta's shares fell about 1.7 per cent in early trading in New York on Monday.
The Class C shares, announced on 21 October, preserve Mark Zuckerberg's voting control while giving Meta another way to raise capital. Microsoft, Alphabet and Amazon report quarterly results this week, with investors focused on whether their AI revenue is growing fast enough to justify similar outlays.
