Meta Platforms announced the creation of non-voting Class C common stock, with the new shares scheduled for issuance on January 19, 2027. The structure will allow Meta to raise capital for AI development, infrastructure and acquisitions without reducing founder Mark Zuckerberg’s voting stake.

Existing Class A and Class B shareholders will receive one Class C share for each share they own. The distribution will be economically comparable to a 2-for-1 stock split but will not change investors’ voting power.

Zuckerberg holds a 13.4% economic stake in Meta but controls about 60.6% of its voting power. Issuing non-voting shares would allow the company to raise funds without diluting that control.

Meta’s financial projections, contained in documents filed with the U.S. Securities and Exchange Commission, anticipate that the company may need hundreds of billions of dollars in the coming years.

Company advisers estimated that Meta could raise about $700 billion through share issuance under its current capital structure before Zuckerberg’s voting power fell below 50%. Chief Financial Officer Susan Li said those figures were theoretical calculations rather than an approved fundraising plan. Meta has not disclosed the size or timing of any potential Class C offering.

AI spending and workforce cuts

Meta’s large-scale investment in artificial intelligence has coincided with financial losses and workforce reductions. Its market capitalization fell by $310 billion in March 2026 amid litigation and rising AI spending.

In April, the company planned to lay off about 8,000 employees, or 10% of its workforce, and eliminate roughly 6,000 open positions to reduce costs. Zuckerberg later canceled a second round of reorganization scheduled for November amid employee dissatisfaction and reports that AI agents had not yet produced the expected productivity gains.

Third-quarter results

Meta reported revenue of $64.6 billion for the July-to-September quarter, an increase of 26% from a year earlier. Net income rose to $9.86 billion from $2.71 billion.

Expenses increased 68% to $51.61 billion, while operating income declined 37% to $12.99 billion. Meta’s operating margin narrowed to 20% from 40%.

The increase in costs included a $9.89 billion charge related to the settlement of lawsuits concerning adolescent mental health. Excluding that charge, operating income would have been $22.88 billion.

Capital expenditures reached $34.91 billion during the quarter. Meta expects full-year 2026 capital expenditures of $135 billion to $145 billion as it continues building AI infrastructure.

The company also projects an annual loss of $18 billion to $19 billion for Reality Labs, its virtual- and augmented-reality division. Third-quarter free cash flow was negative $2.12 billion.

Meta employed 66,775 people at the end of September, down 15% from a year earlier. Its shares fell following the report, according to TradingView.

Management plans to continue aggressive investment in AI infrastructure in 2027. Meta expects that new models and products will help increase revenue and strengthen its position in the artificial intelligence market.

Source: Incrypted