1. Meta's $35 Billion Equity Raise: Two Offerings Launched on October 26
Meta Platforms launched two separate public offerings on October 26, 2026, that together are intended to raise about $35 billion. One sells 250 million Series A depositary shares at a $50 liquidation preference each, worth roughly $12.5 billion. The other sells $22.5 billion of Class A common stock through forward sale agreements. Neither offering depends on the other, and the proceeds are earmarked for general corporate purposes.
The pairing is one of the larger equity financings a major technology company has attempted. It also arrives with an unusual feature: a new class of non-voting Class C stock that Meta plans to introduce in January 2027. The sections below explain how each piece works, who is running the deals, and what shareholders should watch.
2. What is the Meta Series A preferred offering?
The preferred offering consists of 250,000,000 Series A depositary shares. Each depositary share represents a one-twentieth interest in a share of Series A Mandatory Convertible Preferred Stock, a security Meta is creating for this transaction. The preferred stock carries a liquidation preference of $1,000 per share, which works out to $50 per depositary share. Multiplying 250 million units by $50 gives the headline figure of about $12.5 billion.
Underwriters have a 30-day option to buy up to 37.5 million additional depositary shares, which would lift the total if demand is strong. The dividend rate, the public offering price and the conversion rates were left blank in the preliminary prospectus supplement dated October 26, so those terms are set only when the deal is priced.
Dividends on the preferred are cumulative and payable quarterly, on February 15, May 15, August 15 and November 15, beginning February 15, 2027 and running through August 15, 2029. Meta may pay them in cash or in shares of Class A common stock, and after a specific trigger date in Class C shares. Cumulative means that any dividend Meta skips is owed later and builds up ahead of the common stockholders.
3. How does a depositary share work?
A depositary share is a fractional slice of a larger security. A bank or trust company holds the underlying preferred shares and issues receipts, the depositary shares, that trade in small units. Holders receive the economic rights of their fraction, including dividends and the liquidation preference, in proportion to what they own.
Here the arithmetic is straightforward. One preferred share carries a $1,000 liquidation preference and is divided into 20 depositary shares, so each depositary share corresponds to $50. The reason issuers choose this format is accessibility: a $50 unit can be bought by retail investors and smaller funds, whereas a $1,000 unit would narrow the buyer base.
4. Why is the preferred stock called mandatory convertible?
Unlike conventional preferred stock, which can sit on a balance sheet indefinitely, a mandatory convertible has a fixed end date on which it turns into common stock. Meta's Series A converts automatically on the second business day after a final averaging period of 20 trading days ending before August 15, 2029. The number of common shares each holder receives depends on conversion rates that had not yet been set, and those rates are subject to adjustment.
If Meta completes the planned introduction of Class C stock and lists it on a major exchange on or before April 15, 2029, the conversion will deliver Class C shares instead of Class A. Holders also gain an early conversion right: on or after the 50th trading day following the Class C dividend trigger date, they may convert at the minimum conversion rate.
For Meta, the structure has a practical consequence. Because conversion happens in 2029, the share count does not rise by the full amount at once. The company receives capital now, pays a dividend in the meantime, and issues the common stock only later.
5. How do the forward sale agreements work?
The common stock portion is larger, at $22.5 billion, or $25.875 billion if underwriters use their option to buy up to $3.375 billion more within 30 calendar days. Morgan Stanley and Goldman Sachs lead the underwriting. Instead of issuing the shares directly, Meta is entering forward sale agreements with Morgan Stanley Capital Services and Goldman Sachs. Affiliates of those banks, acting as forward sellers, borrow Class A shares and sell them to the underwriters, who place them with investors.
Because the shares sold are borrowed, Meta does not expect to receive cash at the outset. The company chooses when to settle, on or before November 19, 2027, and physical settlement, meaning Meta delivers newly issued shares to the forward purchasers in exchange for cash, is the expected method. The initial forward price equals the public offering price less the underwriting discount, and it is adjusted daily using an overnight bank funding rate less a spread and reduced by expected dividends.
The appeal for an issuer is certainty. The investors' price is fixed on the day of the offering, while Meta can time the actual share issuance and the receipt of proceeds to when it needs the money. The filing notes that the shares can be settled only after the dividend-related Class C changes take effect, at which point each agreement splits into a Class A transaction and a Class C transaction.
6. Who is buying, and what indications of interest exist?
The prospectus supplement states that Nvidia, AMD and Broadcom have indicated interest in buying up to $5.0 billion of the common stock in aggregate. Those indications are non-binding, and the filing does not guarantee that any of the companies will buy or that they will purchase the full amount. All three are suppliers of the chips and networking equipment that power large-scale artificial intelligence data centers, which makes them natural cornerstone participants in a raise intended for general corporate purposes.
The last reported sale price of Meta's Class A stock before the launch, on October 23, 2026, was $642.62, a reference point against which the final offering price will be compared. Settlement of the underwritten sales follows a standard two-business-day cycle once the deal is priced.
7. What is the Class C stock at the center of the deal?
Both offerings are tied to a separate corporate change. Meta's board declared a dividend on October 19, 2026 of one share of Class C common stock for each outstanding share of Class A and Class B common stock. The dividend is contingent on an amended certificate of incorporation, which was filed on October 21 and takes effect on January 19, 2027. Record and payment dates have not yet been set.
Class A carries one vote per share and Class B carries ten, while Class C carries no voting rights beyond what the charter or law requires. After the amendment takes effect, Meta will be authorized to issue 5 billion Class A shares, 4.141 billion Class B shares, 100 billion Class C shares and 100 million preferred shares. The company intends to apply to list Class C on Nasdaq.
The filing cautions that no one can guarantee an active trading market will develop for Class C, and that Class A and Class C prices could diverge. That matters for investors in the preferred, whose conversion and dividend features can reference Class C.
8. How much dilution does the offering create?
According to the filing, Meta has 2,214,455,318 Class A shares outstanding before the offering. After the forward sale agreements are fully settled, that figure would rise to about 2,249,468,234, or about 2,254,720,172 if the underwriters exercise their option in full. That implies an increase of roughly 35 million shares, or about 1.6 percent, in the Class A count from the common offering alone.
Earnings-per-share dilution under the forward agreements is calculated differently. It occurs only when the average market price of the stock exceeds the adjusted forward price, which starts at the offering price less the underwriting discount. Meta also expects to record the forward agreements as derivatives at fair value, so changes in their value could create meaningful volatility in reported earnings.
9. What are the risks written into the forward agreements?
The prospectus describes several circumstances in which the structure could work against Meta. A forward purchaser may accelerate settlement if it cannot borrow shares, if dividends exceed specified thresholds, if ownership limits are crossed, if an extraordinary event is announced or after certain defaults. Acceleration could require Meta to make a substantial cash payment or settle earlier than planned.
Certain bankruptcy or insolvency events of a forward purchaser would automatically terminate its agreement, in which case Meta would receive no proceeds for the unsettled shares. And if a forward seller cannot borrow and deliver shares, Meta must itself issue and sell those shares directly to the underwriters. Hedging by the banks, along with resales of Class C stock and shares linked to the preferred, could also influence trading prices.
10. What happens next?
The immediate milestone is pricing, when Meta sets the final depositary share price, dividend rate, offering price for the common stock and the conversion rate range. Investors will also watch whether underwriters exercise their 30-day options for 37.5 million additional depositary shares and up to $3.375 billion of additional common stock, a signal of how much demand the sales attracted.
After that, attention turns to January 19, 2027, when the charter amendment takes effect, followed by the Class C dividend and Nasdaq listing application. Forward settlement can occur at Meta's discretion until November 19, 2027, and the preferred converts in the period ending before August 15, 2029. Each date marks a point when new shares can reach the market.