Meta Adds Non-Voting Share Class to Raise Cash Without Diluting Votes

Every Meta Platforms shareholder will receive one non-voting Class C share for each share they own. The new share class gives the company stock it can sell to raise money while leaving voting power intact.

The move accompanied third-quarter results in which free cash flow came to negative $2.12 billion. Capital spending of $34.91 billion ran ahead of the cash Meta's operations produced.

Spending That Outruns the Cash Flowing In

A special committee of independent directors put forward the new stock. It offered three main reasons.

• Funding: The shares can back capital raising, employee compensation, possible acquisitions and other corporate needs. The committee connected that to the scale of investment required to compete in artificial intelligence.
• Long-term value: Since its IPO, Meta stock has climbed more than 1,700%, compared with roughly 495% for the S&P 500. That long-term orientation is something the committee wants to keep alive.
• Leadership: In the committee's view, chief executive Mark Zuckerberg should continue running Meta under the founder-led model.

The numbers for the third quarter illustrate how large that investment has become. Year-over-year revenue growth was 26%, taking the total to $64.6 billion. Operating cash flow of $32.79 billion, though, still trailed capital expenditure. A year earlier, free cash flow had come in at a positive $10.63 billion.

Meta has also altered its cash practices this year. Through September, it carried out no Class A buybacks, having spent $26.25 billion on repurchases during the same stretch of 2025. It raised $24.91 billion in long-term debt.

Still, Meta had $82.45 billion in cash and marketable securities as of September 30. A plan or timeline for selling Class C stock is not set out in the earnings release or the 8-K.

The stock dividend will not alter anyone's voting power, according to Meta. A separate agreement, however, caps how many of the new shares Zuckerberg can sell before his voting power is reduced.

The Conditions Attached to Zuckerberg's New Shares

Zuckerberg signed the Founder Alignment Agreement on October 20, according to an 8-K filing. Only 20% of the Class C shares that go to him and certain permitted transferees can be sold without restrictions.

For the remaining 80%, a sale generally demands a corresponding sale or conversion of his voting stock. Each quarter, restrictions are lifted on 2.5% of his dividend shares as long as he stays in full-time leadership.

He has also pledged to live in California, or wherever Meta is headquartered, for eight years while he leads the company. There is room in the pledge for exceptions involving material unforeseen circumstances.

Meta is also obliged to make best efforts so that any Class A buyback is matched by at least as many Class C repurchases. These sale restrictions and the buyback rule become binding only after the new shares are issued.

Non-Voting Shares Arrive in January, and Google Took the Same Path

The new share class becomes effective on January 19, 2027. The board has not yet chosen record or payment dates, but any payment must be made within five business days.

After the dividend is paid, Meta expects the Class A shares to trade as if they had been split two-for-one. Google pursued the same approach in 2014, giving existing holders non-voting Class C shares.

During midday trading on the first day, Google's Class C shares changed hands at $579.38, close to the $579.74 price of its voting Class A stock. Meta shareholders will be able to make the same kind of comparison in January.

Meta stock gained 2.17% in after-hours trading, reaching $712.65 from its October 21 close. The company forecast fourth-quarter revenue of $73 billion to $76 billion.