Meta Issues Non-Voting Class C Shares to Fund AI Spend and Keep Founder Control

Meta Platforms will issue a stock dividend of one non-voting Class C share for every share held, effective January 19, 2027, alongside third-quarter results showing negative $2.12B in free cash flow as $34.91B in capital spending outpaced $32.79B in operating cash flow. A special committee of independent directors recommended the new share class to support capital raising, employee compensation, and potential acquisitions tied to the scale of AI investment while keeping CEO Mark Zuckerberg in control under a founder-led model. Under a Founder Alignment Agreement signed October 20, Zuckerberg and certain permitted transferees can freely sell only 20% of their Class C dividend shares, while the remaining 80% generally requires a matching sale or conversion of voting stock, with restrictions lifting on 2.5% per quarter during his full-time leadership. Zuckerberg also committed to reside in California or wherever Meta is headquartered for eight years while leading the company, subject to exceptions for material unforeseen circumstances, and Meta must use best efforts to match Class A buybacks with at least as many Class C repurchases once issued. Meta halted Class A buybacks through September after spending $26.25B in the same period of 2025, raised $24.91B in long-term debt, held $82.45B in cash and marketable securities on September 30, and set no timeline or plan in its earnings release or 8-K to sell Class C stock.