Meta plans $22.5 billion Class A stock sale and up to $60 billion of Class C stock
Meta plans to offer $22.5 billion of Class A common stock and may also sell up to $60 billion of Class C stock. Five-year credit default swaps on Meta, which pay out if the company defaults, reached 114.5 basis points, the highest level on record, according to Markit data.
Chart: META, one-minute prices, three sessions
Meta plans to offer $22.5 billion of Class A common stock. The company may also sell up to $60 billion of Class C stock. Both moves add to a funding plan the company has been building in public.
Meta announced on Monday, October 26, the launch of two offerings. The first is depositary shares, each representing an interest in its Series A mandatory convertible preferred stock. Preferred stock pays a fixed dividend ahead of common shares, and mandatory convertible preferred must convert into common shares on a set date. The second is the Class A common stock offering, made in connection with forward sale agreements. Under those agreements, shares are sold at a price fixed now and delivered later.
Meta had already set out the broader plan. It raised its 2026 capital spending forecast to $135 billion to $145 billion, and said it plans to issue nonvoting shares and sell more stock to help fund the buildout.
The same weeks brought a verdict ordering Meta to pay $25 billion over a data breach. Five-year credit default swaps on Meta reached 114.5 basis points, according to Markit data, the highest level on record. Bond market measures of Meta's credit risk widened after the company raised its spending forecast and leaned further on debt and new stock.
The launch turns part of the share plan into an actual sale. The preferred structure may limit immediate dilution while still locking in funding. The forward sale agreements, however, mean more Class A shares will be issued whatever the share price is in the near term, a step investors had been expecting since the plan surfaced. The funding needs and the legal costs now bear on each other rather than sitting as separate stories.
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