The common offering grew to $25 billion, sold through forward contracts that delay the cash until Meta needs it. The mandatory convertible preferred carries a 6.5% dividend. Meta's chip supplier Nvidia says it will be one of the buyers.
Meta Platforms set the terms of its equity raise overnight, and demand was strong enough to make it bigger.
The company priced $25.0 billion of Class A common stock at $625.00 a share, upsized from the $22.5 billion it launched on Monday. It also priced $12.5 billion of mandatory convertible preferred stock, sold as 250 million depositary shares at $50 each, with an annual dividend rate of 6.50%. The total priced is $37.5 billion. The offerings are expected to close on Oct. 29.
Nvidia said in a separate announcement that it "will invest $3 billion in Meta's equity offering," as the two companies expand a partnership under which Meta plans to deploy more of Nvidia's infrastructure, including its Vera Rubin systems.
The price
The $625 price is 0.9% below Monday's close of $630.56 and 2.7% below the $642.62 close on Oct. 23, before the offering was announced. It is 18% below the stock's $762.50 close on Oct. 13.
Meta shares fell 1.88% on Monday, against a 1.11% gain in QQQ.
What was raised, and when the cash arrives
The structure separates the headline from the cash. The common shares are sold through forward sale agreements, so Meta receives no money at closing. It can settle, and collect the proceeds, at any time up to Nov. 19, 2027. The 40 million shares involved equal about 1.8% of Meta's Class A shares.
The preferred stock delivers cash at closing. Its 6.50% dividend on $12.5 billion works out to about $813 million a year, payable in cash or, within limits, in shares. It converts into common stock around August 2029.
Beyond this week's sale, the planned $60 billion at-the-market program in Class C shares remains in the background. It would not begin before the first quarter of 2027, its terms have not been set, and no agreement for it exists yet.
The capex gap
Meta's own figures frame the reason. The company expects $135 billion to $145 billion of capital expenditures in 2026. It generated $97 billion of operating cash flow in the first three quarters. Spread evenly, that would be about $129 billion for the full year, short of the low end of the capex range. Meta ended the third quarter with about $82 billion of cash and marketable securities.
The supplier as buyer
Nvidia, AMD and Broadcom had indicated interest in buying up to $5 billion in aggregate. Nvidia now says it will invest $3 billion, equal to 8% of the total priced. Meta buys Nvidia's hardware and plans to deploy more of it. Whether Nvidia's commitment falls within the $5 billion indication was not specified.
The supplier question was a focus when the offering launched on Monday. Pricing answers part of it: one supplier has now said it will invest, while AMD and Broadcom have not said whether they will buy.
Two readings
One reading is that the terms are better than they look. Demand was strong enough to upsize the common, the price came in less than 1% below Monday's close, and the forward structure means Meta issues the shares, and receives the cash, only when it settles, while the preferred delivers immediate cash at a known cost of about $813 million a year.
The other is that the cash arithmetic is the story. On Meta's own figures, a straight-line year of operating cash flow would fall short of the bottom of its capex range, and the part of the raise that arrives now is the preferred, with a 6.5% dividend, while the larger common tranche can sit unsettled for a year at a price 18% below the stock's level two weeks ago.
What to watch
The closing on Oct. 29, any exercise of the underwriters' options, whether AMD and Broadcom buy shares, when Meta settles the forward contracts, and the capex plans Microsoft and Alphabet report on Wednesday and Amazon on Thursday.