In the first full session after pricing $37.5 billion of equity, Meta fell 1.6% while the Nasdaq-100 tracker rose 1.3%. The new mandatory convertible delivers the most shares to holders if the stock is below the offer price in 2029.
Equity Markets | FinancialMarkets.com | October 28, 2026
Tickers: META, QQQ, XLC, NVDA, AMD, AVGO
Meta priced its stock sale at $625 a share. One session later, the market valued the shares below that.
Meta Platforms closed Tuesday at $620.19, down 1.64%, in its first full session after pricing two offerings: 40 million Class A shares at $625, upsized to $25 billion from $22.5 billion, and $12.5 billion of 6.50% mandatory convertible preferred stock sold as depositary shares at $50 each. Both settle on Thursday. The Invesco QQQ Trust rose 1.27% on the same day, and Alphabet, Amazon and Apple all gained, leaving Meta about 2.9 percentage points behind the Nasdaq-100 tracker.
Volume was about 51 million shares, roughly 1.7 times Monday's. The stock had already fallen 7% the day after its third-quarter results on Oct. 22 and 1.9% on Monday, when the offerings were launched.
Who is selling now
The common shares are sold through forward agreements. Morgan Stanley and Goldman Sachs affiliates are borrowing 40 million shares and have agreed to sell them to the underwriters, so the shares reach the market this week. Meta does not receive the money until it chooses to settle, on or before Nov. 19, 2027, and expects about $24.9 billion of net proceeds when it does.
That structure puts the supply in the market immediately while the cash arrives on Meta's schedule. Selling around the pricing is consistent with that, though how much of Tuesday's trading was hedging or borrowing cannot be measured from the outside.
Demand was strong at the price. The common offering ended about five times oversubscribed, Bloomberg reported, citing people familiar with the sale. Nvidia, AMD and Broadcom had indicated interest in buying up to $5 billion of the common stock, but those indications were not binding, and Meta has not disclosed final allocations.
The conversion math
The preferred is where the stock price matters most. Each depositary share converts around Aug. 15, 2029, into between 0.0681 and 0.0800 Class A shares. If Meta trades below $625 at conversion, holders get the maximum 0.0800. Above the $734.21 threshold, about 17.5% higher, they get the minimum 0.0681. In between, they receive shares worth roughly $50.
So holders give up the first 17.5% of upside in exchange for the 6.50% dividend, and Meta issues the most new shares in the scenario where its stock has done worst. At conversion, the preferred alone would add about 17 million to 20 million shares, or about 0.7% to 0.8% of the roughly 2.5 billion outstanding, by our arithmetic. The common adds 40 million, about 1.6%.
The larger plan behind it
The $37.5 billion priced this week is the first part. Meta also plans an at-the-market program of about $60 billion in its new non-voting Class C stock once that class starts trading, which it does not expect before the first quarter of 2027. It has not signed any agreement for that program, and its size and terms "have not been determined," the company said. After the Class C stock exists, the forwards and the preferred can also be settled in non-voting shares.
If all of it happens, the full program would be about 6% of Meta's current market value, roughly in line with Bank of America's estimate of about 150 million Class A-equivalent shares. That is a ceiling built on assumptions, not a schedule.
Meta frames the equity as one source of funding for 2026 capital spending of $135 billion to $145 billion, alongside $97 billion of operating cash flow in the first nine months and about $82 billion of cash and securities. Bank of America analysts estimated that raising $100 billion of debt at 7% would dilute 2027 earnings per share by 6.8%, against 6.5% for an equivalent equity raise.
What the first session does and does not show
On one side, Meta chose equity over debt, which Wedbush analysts called "the more conservative choice given recent credit market strain," sold more than planned and kept control of when it takes the cash. On the other, the stock closed below the offer on the first day, the preferred dilutes most if the stock falls, and the largest piece of the plan is still to come in shares that carry no vote.
What to watch
Settlement on Thursday, whether underwriters exercise their 30-day options for 6 million more common shares and 37.5 million more depositary shares, the date for the Class C dividend, any filing of an at-the-market agreement, and Meta's trading against the $625 offer price.