Meta lifts the floor of its 2026 capex forecast and creates non-voting stock

Meta reported third-quarter results on 21 October that showed the cost of its AI build-out. In its earnings release, revenue rose 26% to $64.6bn, while capital expenditure in the quarter was $34.9bn and free cash flow was negative $2.1bn. Headcount was 66,775, down 15% on a year earlier. Net income was $9.86bn after a $9.89bn charge for the August agreement with 52 state attorneys general over teen mental health, which provides for payments of up to about $18.59bn. Meta narrowed its 2026 capex guidance to $135bn–$145bn from $130bn–$145bn, the second rise in the bottom of the range this year after July’s, and guided fourth-quarter revenue of $73bn–$76bn. Mark Zuckerberg, its chief executive, said the quarter included “launching Muse and Muse Wonder, our first frontier model”. CNBC reported the shares fell almost 7% the next day and that the cost of insuring Meta’s five-year debt against default hit a record.

The release also announced a new class of listed, non-voting Class C common stock, effective 19 January 2027. Meta’s board approved it on the unanimous recommendation of a special committee of independent directors; shareholders approved by written consent. Every holder of Class A or B shares will receive one Class C share, which Meta said should work like a two-for-one split and does not change anyone’s voting power. Meta gave the committee’s reasons as capital raising, employee pay, potential acquisitions, and keeping Zuckerberg as leader.

A Founder Alignment Agreement limits his sales. Of the Class C shares he receives, 20% are freely saleable; the other 80% can be sold only if he also sells or converts voting shares. Restrictions lift gradually while he remains in a full-time executive role, and he agreed to stay a California resident for eight years.

The tax angle was reported separately. TechCrunch, citing a further Meta filing and a New York Times report, wrote that the 20% allowance would let him raise money to pay California’s proposed billionaire tax (Proposition 40), if enacted, without affecting his majority voting control. It quoted the filing as saying the shares could be sold “for any reason, including so that he may pay his potential tax liability under California Proposition 40”. The reasons Meta stated in its own release were capital raising, acquisitions and leadership; it did not cite the tax.

Meta said the record and payment dates for the dividend would be set by the board later.