Meta launched about $35 billion of stock sales on Oct. 26. In its pricing term sheet it raised the common stock part from $22.5 billion to $25.0 billion: 40 million Class A shares at $625 each. It also priced 250 million depositary shares at $50, about $12.5 billion, tied to a 6.50% mandatory convertible preferred stock. That is a preferred share that turns into common stock, with dividends running through August 2029. Both offerings settle Oct. 29.
The formal use-of-proceeds line says only "general corporate purposes." Meta's launch release gives the context. It expects $135 billion to $145 billion of capital expenditures in 2026 and plans to fund them through "a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital." The same release says Meta made $97 billion of operating cash flow in the first three quarters and held about $82 billion in cash and securities at the end of the third quarter. It also says it plans an at-the-market stock program of about $60 billion once its Class C stock begins trading, with no agreement signed yet. Alphabet's June raise used the same preferred structure and named AI infrastructure spending in its use of proceeds.
My read: a company with $82 billion on hand is adding stock to its funding mix, and the stock proceeds arrive late. The forward sale agreements settle on or before Nov. 19, 2027. If a supplier of yours counts on a hyperscaler's spending, ask whether its 2027 plan assumes that customer's cash flow or its access to capital markets. Our look at vendor continuity questions has the list to start with.