Meta has said it is investing heavily in infrastructure and compute capacity, with 2026 capital spending guided to $135 to $145 billion. On October 26 and 27, 2026, it showed what that costs on the financing side: a $37.5 billion equity raise, built from $25.0 billion of Class A common stock and $12.5 billion of 6.5% mandatory convertible preferred stock. The common-stock piece was upsized from the originally planned $22.5 billion. (Source: Meta investor relations)
The headline number is big, but the structure is the real story. Part of this money does not reach Meta for another year, and part of it will turn into extra shares in August 2029. This post walks through exactly what was sold, at what price, when Meta gets paid, and how it compares with the other giant AI financing announced the same week.
Quick summary: Meta priced $25.0B of Class A stock at $625.00 per share (upsized from $22.5B) plus about $12.5B of 6.50% Series A mandatory convertible preferred sold as $50 depositary shares. Closing was expected October 29, 2026. The common-stock cash arrives only when Meta settles forward sale agreements, on or before November 19, 2027. Proceeds are for general corporate purposes, and Meta's launch release separately says it is investing to expand infrastructure and compute capacity.
What Meta actually sold
There are two separate offerings, and neither depends on the other closing. The first is Class A common stock: 40,000,000 shares at $625.00, which is the $25.0 billion headline. Underwriters hold a 30-day option for up to $3.75 billion more. (Source: Meta investor relations)
The second is preferred stock sold in small slices. Meta issued 250,000,000 depositary shares at $50 each, and each depositary share represents a 1/20th interest in one share of 6.50% Series A mandatory convertible preferred stock. That comes to about $12.5 billion, or about $14.3 billion if the underwriters' 37,500,000-share option is fully exercised. Meta applied to list them on Nasdaq under the symbol METAM. (Source: Meta investor relations)
| Piece | Size | Price or rate | When Meta gets the money |
|---|---|---|---|
| Class A common stock | $25.0B (upsized from $22.5B) | $625.00 per share; initial forward price about $622.92 | At forward settlement, on or before November 19, 2027 |
| Series A mandatory convertible preferred | About $12.5B (250M depositary shares) | $50 per depositary share; 6.50% dividend on a $1,000 liquidation preference | At closing, expected October 29, 2026 |
| Over-allotment options | Up to $3.75B common; 37.5M more depositary shares | 30-day options | Only if exercised |
| Planned Class C at-the-market program | About $60B | Not yet agreed; expected to start in Q1 2027 | Not applicable yet |
The forward sale: why the cash comes later
The common-stock deal is a forward sale. Morgan Stanley Capital Services and Goldman Sachs act as forward purchasers. They sell the 40,000,000 shares to the public through underwriters, and Meta agrees to deliver shares to them later for cash at a pre-set forward price. Meta says it does not expect to receive proceeds from the forward purchasers' initial share sales. Expected net proceeds are about $24.9 billion, or about $28.7 billion with the option, and Meta can settle on dates it chooses up to November 19, 2027. (Source: Meta investor relations)
In plain terms, investors get their shares and the price is locked today, but Meta's cash waits. A company might prefer that if it wants price certainty without issuing new shares into the market immediately. Meta has not said why it chose this route, so treat any explanation as interpretation rather than fact.
The preferred stock: a bet that converts in 2029
The preferred shares pay a 6.50% annual dividend on the $1,000 liquidation preference per share, payable quarterly from February 15, 2027 through August 15, 2029 when declared by the board, in cash, Class A stock (subject to limits) or a mix. On or about August 15, 2029, each preferred share automatically converts into between 1.3620 and 1.6000 Class A shares, which is 0.0681 to 0.0800 per depositary share. (Source: Meta investor relations)
A back-of-envelope reading of those numbers, which is my arithmetic and not a Meta statement: a $50 depositary share converting at 0.0800 shares implies a reference price of $625, and at 0.0681 shares implies roughly $734. So holders get the maximum number of shares if the stock is at or below about $625 near conversion, and fewer shares as it rises toward roughly $734 and above. The exact rate depends on a 20-trading-day average price, so this is only a rough guide.
What is Class C stock and why does it keep appearing?
Meta filed an amended charter in Delaware on October 21, 2026 that establishes Class C common stock. The filings say that once Class C is issued, the preferred stock can convert into Class C instead of Class A, and the forward agreements can reference both classes. A planned at-the-market program of about $60 billion of Class C depends on that stock beginning to trade and is not expected before the first quarter of 2027. (Source: SEC filing)
The same filing says NVIDIA, AMD and Broadcom indicated non-binding interest in buying up to $5.0 billion of Class A stock as cornerstone investors. Because those indications are not binding, nobody should treat that $5 billion as committed. (Source: SEC filing)
Compare it with SpaceX's $40 billion lease
The same week, SpaceX announced a binding commitment for an approximately $40 billion master finance lease for GPUs and related equipment with an entity managed by Apollo Global Management. Apollo's entity buys the hardware and leases it to SpaceX on terms of roughly 5 to 5.25 years, starting as each batch is delivered. The deal is expected to close by year-end, with deliveries starting in the first half of 2027, and the chips are Nvidia's next-generation Vera Rubin. (Source: TechCrunch)
| Feature | Meta equity raise | SpaceX GPU lease |
|---|---|---|
| Headline size | $37.5B ($25.0B common + $12.5B preferred) | About $40B |
| Instrument | Stock and mandatory convertible preferred | Master finance lease with an Apollo-managed entity |
| Dilution for existing holders | Yes, new shares and future conversion | No new shares in the deal; lease payments instead |
| Timing | Close expected October 29, 2026; forward cash by November 19, 2027 | Close by year-end 2026; deliveries from H1 2027 |
TechCrunch also reports that SpaceX's AI segment, which includes Grok, the Cursor coding tool and cloud compute, brought in $7.6 billion of its $14.6 billion third-quarter revenue, and that capital spending is expected to hit $35 billion to $40 billion in the fourth quarter alone. Those are company-reported figures. (Source: TechCrunch)
What this means for everyday AI users
Nothing changes in your chatbot tomorrow. But the pattern matters: the biggest AI builders are now using equity, preferred stock and equipment leases, not only cash flow, to pay for chips and data centers. Meta says it plans to fund investments through operating cash flow, investment-grade debt, strategic partnerships and equity capital. (Source: Meta investor relations)
- Expect more structured financing (leases, convertibles, forwards) as AI capital spending keeps rising.
- Watch whether Meta's Class C program starts in Q1 2027, since that is the next large step.
When you read a headline like "$37.5 billion raised," ask three questions: how much is cash now, how much is later, and how much converts into shares. Here the answers are roughly $12.5 billion at closing, about $25 billion by late 2027, and the preferred converts in 2029.
01How much did Meta raise in total?
$37.5 billion: $25.0 billion of Class A common stock at $625.00 per share plus about $12.5 billion of 6.50% Series A mandatory convertible preferred sold as $50 depositary shares. Over-allotment options could add more.
02When does Meta receive the $25 billion from the common stock?
At forward settlement, which Meta can choose on dates on or before November 19, 2027. Meta does not expect to receive proceeds from the forward purchasers' initial share sales.
03What is a mandatory convertible preferred?
A preferred share that pays a fixed dividend, here 6.50% on a $1,000 liquidation preference, and automatically turns into common stock on a set date, here on or about August 15, 2029.
04Is the $60 billion Class C program part of this deal?
No. Filings describe a planned at-the-market program of about $60 billion of Class C stock that is not yet agreed and is expected to start in the first quarter of 2027.
05How is this different from the SpaceX financing?
Meta is selling equity-linked securities, while SpaceX committed to roughly a $40 billion lease with an Apollo-managed entity that buys the GPUs and leases them back.
If you want to see how different models explain financing deals like this one, LumiChats puts 40+ premium AI models side by side in one subscription, so you can ask the same question to several and compare the answers.
