Meta’s Unusual Stock Split Comes With a $60 Billion Twist Investors Should Know About
Meta just announced a stock split that doubles as a capital-raising machine, and buried inside the financing plan is a number that raises serious questions about what happens to your slice of future earnings.
Meta’s $60 Billion Number
$60 billion is the figure that changes how to read the Class C story at Meta Platforms (NASDAQ:META | META Price Prediction). That number is the size of a planned at-the-market stock-sale program, built on new nonvoting Class C shares, that Meta disclosed in its October 26 financing announcement. The program is the largest part of a plan worth approximately $95 billion. The rest is roughly $35 billion in underwritten public offerings: $22.5 billion in common stock and approximately $12.5 billion in securities representing mandatory convertible preferred stock. How the $60 billion is classified matters. The program has not yet been established or committed, so it is planned capacity that Meta has yet to use.
The Class C shares will be handed out as a stock dividend. On the third-quarter call, Meta said stockholders will get one nonvoting share for each share they hold, “effectively resulting in a 2-for-1 stock split,” with trading expected to start in late January 2027. Meta has no prior stock splits on record. That is the twist: the split creates the same stock the $60 billion program would sell.
What the $60 Billion Means for Shareholders
Meta needs outside money because its AI spending is running ahead of the cash its business brings in (the same expansion is raising a whole set of power and infrastructure suppliers we covered in a free report on seven AI infrastructure stocks that aren’t chipmakers). Management expects 2026 capital expenditures of $135 billion to $145 billion. Meta generated approximately $97 billion in operating cash flow in the first nine months of the year. It ended September with $82.4 billion in cash and marketable securities and $83.7 billion in debt. Third-quarter capex alone reached $34.91 billion, up 85.38% year over year, and free cash flow came in at negative $2.12 billion.
Shareholder returns have already changed. Meta reported zero share repurchase outflow in both the June and September 2026 quarters. In fiscal 2025, it spent $26.248 billion on repurchases. The dividend continues, with $1.36 billion paid in the third quarter. For years, Meta used its cash to buy back stock. Now it is getting ready to sell stock.
Control is the other issue. Chief financial officer Susan Li said the new class exists to create “a publicly traded nonvoting stock usable for capital raising, employee compensation, acquisitions, and other general corporate purposes, while preserving the voting power of existing Class A and B shareholders.” On the October 21 call, she also said, “We do not have any specific financing plans to announce at this time.” The financing plan came out five days later. Meta also said three chip companies had expressed nonbinding interest in buying up to $5 billion of its Class A shares.
Market Reaction So Far
Shares fell 2.87%, from $630.56 on October 26 to $612.49 at the October 28 close. Measured from the earnings report, the stock is down 12.19% over one week, from $697.52. Even so, Bloomberg reported that the underwritten stock sale ended oversubscribed. Institutions wanted the new shares, but the price existing holders own fell anyway.
Bear Case: Per-Share Earnings Get Harder to Grow
Sales are holding up. Third-quarter revenue reached $64.60 billion, up 26.1%, beating the $63.39 billion consensus. Profit per share fell short. GAAP diluted EPS of $3.83 missed the $5.70 consensus by 32.79%, weighed down by a $9.89 billion litigation charge. Without that charge, EPS would have been $7.40. Operating margin fell to 20% from 40% a year earlier, and total expenses rose 68% to $51.61 billion.
Owners of the stock should focus on per-share results. Every new common or Class C share, plus the mandatory convertible preferred when it converts, splits future profit across more shares. Meta’s total earnings must grow faster than its share count just for each holder’s earnings to stay level. Costs are still rising.
Li said that as Muse adds users, “we expect total serving costs to rise.” Mark Zuckerberg expects to improve Muse’s cost efficiency by more than 10x in the next year, and that goal supports much of the bull argument. Meanwhile, additional youth-related trials are scheduled for the coming months. At a P/E of 22, investors still value Meta as a steady earner, even as it takes on new dilution and legal risk.
Bottom Line for Long-Term Holders
Three things to track next: Class C trading in late January 2027, the upcoming youth-related trials, and whether Meta delivers its fourth-quarter revenue guidance of $73.00 billion to $76.00 billion. Above all, watch whether Meta turns on the available $60 billion program. Meta can keep growing total profit while each shareholder’s share of it gets smaller, and that $60 billion shows how much harder it could get to keep per-share earnings rising.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
