From Decrypt · By Jose Antonio Lanz
In brief
Meta's board approved non-voting Class C stock on Oct. 19, and Class A and Class B holders will receive one Class C share per share held starting Jan. 19, 2027, in what works as a two-for-one split.
Mark Zuckerberg holds about 60.6% of the vote on a 13.4% economic interest, and the Class C structure lets Meta sell equity without diluting that vote.
Meta's filing says management forecasts showed a need to raise "hundreds of billions of dollars," while CFO Susan Li told analysts the company has nothing to announce on equity financing.
Meta's board has approved a new class of non-voting stock, and every holder of Class A and Class B shares will receive one new share for each share they own. The company disclosed the plan on Wednesday with its third-quarter results, and the Class C shares come into existence on Jan. 19, 2027.
The one-for-one dividend works as a two-for-one stock split, and Meta says it will not change anyone's voting power. Because Class C shares generally carry no vote, Meta can sell them for cash, or use them as pay and acquisition currency, without shrinking Mark Zuckerberg's control.
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Zuckerberg held about 60.6% of the voting power on Oct. 1 against a 13.4% economic interest, according to the information statement Meta filed with the SEC. The gap comes from the dual-class setup, where Class A shares carry one vote each and Class B shares carry 10, and he beneficially owns about 341 million Class B shares.
According to the SEC filing, advisers at Moelis told the board's special committee that Meta could raise about $700 billion in equity over several years before Zuckerberg's voting power fell below 50%, according to the filing. Management also told those advisers that its long-term forecasts showed a need to raise "hundreds of billions of dollars" over several years, starting as early as fall 2026.
CFO Susan Li framed the filing's "hundreds of billions" language differently on a follow-up call with analysts, calling it "a theoretical maximum" computed to determine what level of equity financing would trigger a loss of founder control. It is "not actually a description of our present equity financing needs or plans," she said, and Meta does not have "anything to announce on that front." The structure is approved, while the size and timing of any equity sale are not disclosed.
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