Meta launches non-voting shares to fund expanded AI infrastructure spend
Meta introduced a new class of non-voting stock to raise capital for its AI expansion without diluting founder control. The move accompanies a revised data center budget of up to $145 billion for the year.
Meta announced the creation of a new Class C share class that carries no voting rights, with trading set to begin in January. The company stated that this instrument allows it to raise capital for AI-driven growth while preserving Mark Zuckerberg's voting control, which remains above 50%. Existing shareholders will receive these new shares as part of the transition. The announcement coincided with Meta’s third-quarter earnings, where the company raised its capital expenditure guidance for data centers and related infrastructure to between $135 billion and $145 billion for the current year, up from a previous minimum of $130 billion. CFO Susan Lee explained that the new stock class expands funding tools and provides flexibility to meet the significant investment required to sustain growth and expand infrastructure amidst the industry's AI transformation. Meta currently holds $900 billion in liabilities, including $350 billion in non-cancellable data center contracts, but only $83 billion is issued as long-term bonds. Financial planning advice attached to the earnings report indicated that issuing voting stock could allow the company to raise up to $700 billion without diluting Zuckerberg's vote below 50%, a figure that suggests the company is tapping all available capital pools to hedge against potential bond market saturation. Meta reported quarterly revenue growth of 26%, which exceeded expectations, while daily active user growth was modest at 3%. The stock rose approximately 3% in reaction to the news, suggesting shareholder acceptance of the potential dilution associated with the new share class.