Meta Found a Way to Raise Money Without Handing Out More Votes

Meta Platforms will give shareholders one non-voting Class C share for every share they own. The new class gives Meta stock it can sell to raise money without diluting voting power.

The plan arrived with third-quarter results showing free cash flow of negative $2.12 billion. Capital spending of $34.91 billion outpaced the cash Meta’s operations generated.

A Spending Bill Bigger Than the Cash Coming In

A special committee of independent directors recommended the new stock. It gave three main reasons.

Funding: The stock can support capital raising, employee pay, potential acquisitions, and other corporate purposes. The committee tied this to the scale of investment needed to compete in AI.
Long-term value: Meta stock has gained over 1,700% since its IPO, versus about 495% for the S&P 500. The committee wants that long-term focus to continue.
Leadership: The committee wants CEO Mark Zuckerberg to keep running Meta under its founder-led model.

The third-quarter figures show the scale of that investment. Revenue rose 26% year over year to $64.6 billion. Yet, operating cash flow of $32.79 billion still fell short of capital spending. A year earlier, free cash flow stood at a positive $10.63 billion.

Meta has also changed how it handles cash this year. It made no Class A buybacks through September, after spending $26.25 billion on them in the same period of 2025. It raised $24.91 billion in long-term debt.

Still, Meta held $82.45 billion in cash and marketable securities on September 30. Neither the earnings release nor the 8-K sets out a plan or timeline to sell Class C stock.

Meta says the stock dividend will not change any shareholder’s voting power. However, a separate agreement limits how many new shares Zuckerberg can sell without reducing his voting power.

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The Strings Attached to Zuckerberg’s New Shares

Zuckerberg signed this Founder Alignment Agreement on October 20, an 8-K filing shows. Only 20% of the Class C shares going to him and certain permitted transferees can be sold freely.

For the other 80%, each sale generally requires a matching sale or conversion of his voting stock. Restrictions lift on 2.5% of his dividend shares each quarter while he stays in full-time leadership.

Zuckerberg also committed to live in California, or wherever Meta is headquartered, for eight years while he leads it. The pledge allows exceptions for material unforeseen circumstances.

Furthermore, Meta must use best efforts to match Class A buybacks with at least as many Class C repurchases. The sale limits and buyback rule apply only after the new shares are issued.

Non-Voting Shares Land in January, and Google Has Been Here Before

The new share class takes effect on January 19, 2027. The board has yet to set record or payment dates, but payment must follow within five business days.

Once the dividend is paid, Meta expects Class A shares to trade as if split two-for-one. Google took the same route in 2014, when it distributed non-voting Class C shares to existing holders.

In midday trading on day one, Google’s Class C shares fetched $579.38, against $579.74 for voting Class A stock. Meta investors will get their own version of that comparison in January.