Meta priced its stock offering on October 27, 2026, setting a $625 price for 40 million Class A common shares and a 6.50% dividend rate for a separate preferred offering. The Meta stock offering’s $25 billion common leg was increased from $22.5 billion, but the company will not receive those proceeds at closing because the shares are being sold through forward agreements.

Key Takeaways

  • The common offering is expected to generate about $24.9 billion before expenses when Meta settles the forward agreements.
  • The preferred offering comprises 250 million depositary shares at $50 each, or $12.5 billion gross.
  • Both offerings are expected to close on October 29, and neither depends on the other.

Meta stock offering delays common proceeds

Affiliates of Morgan Stanley Capital Services and Goldman Sachs will borrow the common shares and sell them to underwriters. Meta therefore delivers no stock and receives no common-offering proceeds at closing.

The company expects approximately $24.9 billion before expenses upon settlement, based on an initial forward price of about $622.92 per share. Meta can choose settlement dates through November 19, 2027.

Underwriters have a 30-day option to purchase up to $3.75 billion of additional common shares, potentially increasing the offering to 46 million shares. Meta shares traded at $630.50 in premarket trading.

Preferred shares carry a 6.50% dividend

Each $50 depositary share represents one-twentieth of a Series A mandatory convertible preferred share. The underlying preferred shares have a $1,000 liquidation preference and pay a 6.50% annual dividend when declared by Meta’s board.

Dividends are payable quarterly from February 15, 2027, through August 15, 2029. Meta may pay in cash, Class A stock within specified limits, or a combination. Underwriters also have a 30-day option to buy up to 37.5 million additional depositary shares.

Each underlying preferred share is scheduled to convert automatically on or about August 15, 2029, into between 1.3620 and 1.6000 Class A shares, with the ratio determined by a 20-day volume-weighted average price shortly before conversion.

Class C plans and chipmaker interest

Meta has targeted January 19, 2027, for a distribution of one nonvoting Class C share for each Class A or B share. Once Class C shares are issued, the preferred conversion shifts to that class; Meta may also settle the forward agreements entirely in Class C shares under certain conditions.

A separate proposed program to sell up to $60 billion of Class C stock is not expected to be established before the first quarter of 2027, and Meta says there is no assurance it will be established.

Nvidia, AMD and Broadcom indicated nonbinding interest in buying up to $5 billion of Class A shares collectively. The pricing announcement did not confirm how much, if any, they purchased.

Next milestone

The next scheduled milestone is the expected October 29 closing of the two offerings.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.