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Meta launched two share offerings worth about $35bn on Monday, as it looks for new ways to pay for its growing spending on AI.
The larger offering is $22.5bn of Class A common stock sold through forward sale agreements. Under these deals, Meta delivers the shares and receives the money later, by 19 November 2027 at the latest.
The second offering is about $12.5bn of mandatory convertible preferred stock. These shares pay a dividend and turn into common stock around 15 August 2029. Meta will set the dividend rate when the shares are priced.
Meta said it will use the money for general corporate purposes. Because of the forward agreements, it does not expect to receive any cash from the common stock sale at first.
Morgan Stanley and Goldman Sachs are running both sales. Banks can also buy up to $3.375bn more common stock and 37.5 million more preferred shares within 30 days.
Nvidia, AMD and Broadcom, three of Meta’s main chip suppliers, have together shown interest in buying up to $5bn of the common stock, Meta said. That interest is not binding.
The company also plans a separate programme to sell about $60bn of nonvoting Class C shares on the open market from early 2027. It has not yet signed an agreement for that programme.
The company expects to spend $135bn to $145bn on capital projects this year, mostly on data centres and chips. Its free cash flow turned negative in the third quarter as that spending rose.
Even so, Meta generated $97bn of cash from operations in the first nine months of the year, according to Investing.com. It held about $82bn in cash and securities at the end of September.
Much of the spending goes on computing capacity, including Meta’s CoreWeave deals, now worth $35bn in total. It also supports products such as the Muse agent, launched in September.
Meta shares fell as much as 4% on Monday before recovering to trade about 1% higher.
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