Meta Platforms (NASDAQ: META) shares fell 3.40% to $673.79 in Thursday’s premarket trading despite stronger-than-expected third-quarter revenue, as investors weighed the costs of its artificial intelligence expansion and a new nonvoting share plan.
The social media and messaging giant raised the lower end of its 2026 capital spending forecast and announced plans to introduce a new class of publicly traded nonvoting shares.
The company reported third-quarter revenue of $64.6 billion, up 26% from a year earlier and above analysts’ expectations of $63.34 billion. It forecast fourth-quarter revenue of $73 billion to $76 billion, compared with a consensus estimate of $73.57 billion.
Advertising Growth Supports Results as AI Spending Rises
Meta’s advertising business benefited from a 10% year-over-year increase in ad impressions and a 14% rise in average advertising prices, according to the company’s third-quarter results.
Diluted earnings were $3.83 per share, or $7.40 excluding a $9.89 billion charge tied to Meta’s August 2026 agreement with 52 attorneys general to resolve litigation over teen mental health and social media.
Meta also raised the lower end of its 2026 capital expenditure forecast from $130 billion to $135 billion, while retaining the $145 billion upper limit. The spending includes investments in chips and data centers as the company expands its artificial intelligence infrastructure.
Third-quarter free cash flow was negative $2.12 billion, compared with positive $10.63 billion a year earlier.
Meta ended Wednesday’s regular session at $697.52, up 0.47%. Shares subsequently rose about 4% in after-hours trading following the earnings announcement before retreating in Thursday’s premarket session. The reversal came amid broader pressure on technology shares, while Meta’s new nonvoting share plan renewed scrutiny of the capital required to fund its AI expansion, according to Reuters.
Meta’s Class C Plan Links Financing Needs With Zuckerberg’s Voting Control
Meta said its new nonvoting Class C common stock would provide another way to raise capital, finance acquisitions and compensate employees without issuing additional voting rights as it expands its AI infrastructure.
Three long-range forecasts presented to Meta’s board each projected a need to raise hundreds of billions of dollars over several years, potentially beginning as early as fall 2026, according to the company’s preliminary information statement. The forecasts addressed Meta’s broader financing needs but did not specify how much capital the company planned to raise through Class C shares or provide a timeline for issuing them.
The company plans to distribute one Class C share for every existing Class A or Class B share through a stock dividend. The distribution is expected to have an economic effect similar to a two-for-one stock split without changing shareholders’ relative voting power or economic ownership.
Future issuances of additional Class C shares could dilute existing shareholders’ percentage ownership without reducing the voting power attached to their existing shares.
The amended charter establishing the new share class is scheduled to take effect on January 19, 2027. The dividend record and payment dates have not yet been announced.
The plan also includes a Founder Alignment Agreement with CEO Mark Zuckerberg, who had considered leaving California ahead of the November 3 vote on Proposition 40, a proposed one-time 5% wealth tax on billionaires.
Meta’s independent board committee said the proposal could expose Zuckerberg to a multibillion-dollar tax bill. Under the arrangement, he would receive Class C shares through the same dividend as other shareholders, enabling him to sell some of those shares to cover a potential liability without immediately surrendering corresponding voting rights.
In exchange, Zuckerberg committed to remain a California resident, or in another jurisdiction where Meta maintains its headquarters, for eight years while continuing in a qualifying full-time leadership role. The agreement permits relocation under material unforeseen circumstances.
Zuckerberg may sell 20% of his initial Class C allocation without special restrictions, representing approximately 10% of his combined shareholdings following the dividend. The remaining 80% is subject to conditions that generally require corresponding sales or conversions of his existing voting shares, although certain exceptions apply and some restrictions expire over time.
Those special sale restrictions apply to Zuckerberg and specified permitted transferees, not other shareholders receiving Class C dividends.
As of October 1, Zuckerberg controlled approximately 60.6% of Meta’s voting power while owning about 13.4% of its economic interests.
Shareholders approved the amended charter and changes to Meta’s 2025 Equity Incentive Plan through written consent, while the board separately declared the initial Class C dividend. The dividend has not yet been distributed, and Meta has not announced the size or timing of any future capital raising using the new shares.
