By Meta priced its equity raise overnight at terms that upsize the common leg and set the cost of the preferred. The company sold $25.0 billion of Class A common at $625.00 a share, raised from the $22.5 billion announced on Monday, alongside 250 million depositary shares at $50 carrying a 6.50% dividend.
Meta receives none of the $25 billion now. The common leg runs through forward sale agreements, so the cash arrives whenever Meta chooses to settle, on or before 19 November 2027. Meta stock traded at $630.50 in premarket, flat on the session.
Meta stock has fallen 17.99% in a month and 9.61% in five sessions, which is the drawdown the $625 pricing sits inside rather than a one-day discount. Source: TradingViewForty Million Shares at $625 and 250 Million Depositary Shares at $50
The common offering covers 40,000,000 shares initially, with a 30-day underwriter option for up to $3.75 billion more that would lift it to 46,000,000 shares. At $625 the price sits 2.74% below the $642.62 Friday close that Meta stock carried into Monday’s launch, when the shares traded at $635.06 in premarket.
The preferred leg is 250,000,000 depositary shares at $50 each, $12.5 billion gross. Each depositary share represents a twentieth of a share of 6.50% Series A Mandatory Convertible Preferred Stock with a $1,000 liquidation preference. A 30-day option on a further 37,500,000 depositary shares would take net proceeds to roughly $14.3 billion. The depositary shares have been filed to list on Nasdaq under the ticker METAM.
Both offerings are expected to close on 29 October and neither is conditioned on the other, per the prospectus supplement. Morgan Stanley and Goldman Sachs are lead bookrunners.
Meta Stock Gets No Cash From the Common Leg Until the Forward Settles
Affiliates of Morgan Stanley Capital Services and Goldman Sachs borrow the 40 million shares and sell them to the underwriters, which means Meta itself delivers no stock and takes no proceeds at closing. The Meta stock changing hands this week is borrowed stock rather than newly issued shares.
Meta expects about $24.9 billion before expenses when it settles, at an initial forward price of about $622.92 a share, $2.08 below the offer price. Settlement happens on dates Meta picks, up to 19 November 2027. Just $12.5 billion from the preferred is cash in hand this month, which puts the real near-term figure at roughly a third of what the $35 billion headline implies for Meta stock.
Investor Takeaway
Meta stock holders face immediate dilution of about 1.82% against a 2.20 billion share float, while the company waits up to 13 months for the cash.
The 6.50% Coupon Undercuts Meta’s Own Long Bonds
Dividends run at 6.50% a year on the $1,000 liquidation preference, payable quarterly from 15 February 2027 through 15 August 2029, and only when the board declares them. Meta can settle them in cash, in Class A stock within limits, or in a mix.
Meta’s own 2052 bonds yield 7.155% and its 2066 issue yields 7.480%, so the market is charging more for forty-year senior debt than Meta is paying on a junior instrument that converts to equity. The company is also carrying $80.92 billion of long-term debt against $82.45 billion of cash, and it posted negative free cash flow of $2.12 billion in the third quarter. Meta stock is funding a buildout that its operations are no longer covering.
The change is in the second paragraph, which previously opened “The comparison that matters for Meta stock is the company’s own outstanding paper.” That opener is gone and the yields now lead.
Conversion Lands in August 2029 and May Arrive as Class C
Each preferred share converts automatically on or about 15 August 2029 at a ratio between 1.3620 and 1.6000 Class A shares, set by the 20-day volume-weighted average price ending shortly before that date. Those ratios imply a floor at $625, matching the common offer price, and a cap near $734.21, a conversion premium of about 17.47%.
Anyone modeling Meta stock from here has to account for the Class C wrinkle. Its charter was filed on 21 October, and the nonvoting shares are due as one Class C per Class A or B share, targeted for 19 January 2027, which is a dividend rather than a conventional split. Once they are issued the conversion shifts to Class C, and Meta may settle the forward agreements entirely in Class C under certain conditions.
Nvidia, AMD and Broadcom Indicated Up to $5 Billion, Without Committing
Three chip suppliers signaled appetite for up to $5.0 billion of Class A stock between them at launch. Those indications are non-binding, and the pricing release does not confirm what any of them took.
Nvidia separately agreed to invest $3 billion in Meta equity as part of an expanded AI deal covering the Muse assistant and running Meta’s models on Nvidia hardware. Circular arrangements of that kind are the same pattern FinanceFeeds has tracked through the financing reassessment at the neocloud operators and the backlog-against-liabilities problem in AI data centers.
The $60 Billion Class C Program Is Not Money Yet
An at-the-market program of up to $60 billion in Class C stock sits behind all of this, and it should not be added to anything. Meta does not expect to establish it before the first quarter of 2027 and says there is no assurance it will be established at all.
Meta stock is down 4.85% for the year and 14.42% over twelve months on a market value of $1.64 trillion and 22.12 times trailing earnings, with TradingView’s technical summary and analyst rating both neutral. Third-quarter revenue rose 26% to $64.6 billion and the fourth-quarter guide is $73 billion to $76 billion, so the spending is landing against a business still growing, which is the argument for funding Meta stock issuance this way. The same AI capex question is running through this week’s big tech reporting calendar, where Microsoft has offered exits to 60,000 staff while guiding to a $50 billion capex quarter.
Investor Takeaway
The 6.50% coupon prices below Meta’s own long bonds, so the preferred is the cheaper funding route and the one Meta stock holders should expect to see used again.
