Meta Platforms priced two offerings on 26 October. It increased a sale of Class A stock under forward sale agreements to $25.0bn, or 40m shares at $625 each, and sold 250m depositary shares representing 6.50% Series A mandatory convertible preferred stock, from which it expects net proceeds of approximately $12.5bn. The preferred offering closed on 29 October.
Neither instrument need end in shares that vote. If Meta issues listed Class C stock on or before 15 April 2029, a “Class C Trigger Event”, the preferred converts into Class C rather than Class A, and “in certain circumstances, we will have the ability to settle all of the forward sale agreements through the delivery of only shares of Class C Common Stock”. Class C shares “will have no voting rights”, except as the charter provides or the law requires. Meta also plans an at-the-market programme of approximately $60bn once Class C trades. Meta calls the equity “a complementary source of capital”.
A class created by written consent
The Class C stock was not put to a shareholder meeting. A preliminary information statement filed on 21 October records that Chan Zuckerberg holding companies with approximately 56.1% of the voting power approved the new charter by written consent on 20 October. The filing states that “The Written Consent constitutes the only shareholder approval required” under Delaware law and Meta’s charter and bylaws. The charter takes effect on 19 January 2027, and each Class A and Class B share will then receive one Class C share within five business days. Class B shares carry ten votes each and Class A shares one. Mark Zuckerberg held approximately 60.6% of the voting power and 13.4% of the economic interest on 1 October.
A special committee of independent directors recommended the plan unanimously. Its aim is to “create a publicly traded, non-voting equity security” for capital raising, pay and acquisitions “without diluting the voting power of the existing Class A and Class B common stock”. Zuckerberg, the filing records, made clear “that he would not support a significant equity financing that would have the effect of reducing his voting power in the Company”. A founder alignment agreement commits the board to a further one-for-one Class C dividend each time the 30-day average price of Class C reaches a further doubling of $580.60 (the Class A price on 10 September 2026, adjusted for stock dividends), provided annualised shareholder returns since then are at least 10%.
Why it matters for index-heavy owners
For universal owners the issue is the widening gap between money and voice. Every Class C share sold through the forwards, the preferred or the at-the-market programme adds to the economic stake held by outside investors while the votes stay where they are. Index funds would be natural buyers only if Class C is added to the indices they track, and the filing says the special committee sized the dividend at one-for-one “in order to increase the likelihood that the Class C common stock would be included in relevant stock indices”. Without Class C, issuing more Class A stock over time “could eventually result in Mr. Zuckerberg owning less than a majority” of the vote. Class C removes that check. Proxy voting, one of a passive owner’s few levers over capital allocation, will cover a shrinking share of its Meta equity just as the committee calls the scale of investment required “unprecedented”.
The other side of the argument
There is a case for the structure. Existing holders receive Class C pro rata, so the distribution itself dilutes no one’s economic interest, and all three classes are to receive the same consideration per share in a merger or recommended tender offer, subject to differences in the voting rights of any securities received. The committee also noted that Zuckerberg “is not on the verge of losing voting control”.
What to watch
- 19 January 2027: the new charter takes effect, with the Class C dividend due within five business days.
- The Class C dividend and first trading, which switch the preferred’s conversion into Class C and unlock the planned $60bn at-the-market programme.
- 19 November 2027: the last date for settling the forward sales, at Meta’s discretion and subject to conditions.
- How index providers treat Class C, and whether other founder-controlled companies copy the structure.
Sources
- Preliminary Information Statement (Schedule 14C), Meta Platforms, Inc. (SEC), 21 October 2026
- Filing index: Form PRE 14C, Accession No. 0001628280-26-066710, Meta Platforms, Inc. (SEC), 21 October 2026
- Pricing Term Sheet (free writing prospectus), Meta Platforms, Inc. (SEC), 26 October 2026
- Meta Announces Launch of Offering of Depositary Shares Representing Series A Mandatory Convertible Preferred Stock and Offering of Class A Common Stock in Connection with Forward Sale Agreements, Meta Platforms, Inc. (SEC free writing prospectus), 26 October 2026
- Prospectus Supplement: 250,000,000 Series A Depositary Shares Each Representing a 1/20th Interest in a Share of 6.50% Series A Mandatory Convertible Preferred Stock, Meta Platforms, Inc. (SEC Form 424B5), 26 October 2026
- Form 8-K Current Report, Meta Platforms, Inc. (SEC), 29 October 2026