Meta used the publication of its third-quarter results on 21 October 2026 to announce a capital reform that its minority shareholders did not have to approve. The group is creating a Class C share, listed on the stock exchange and without voting rights, which will take effect on 19 January 2027. According to the press release filed with the SEC, these securities may be used to raise capital, compensate employees and finance potential acquisitions, given the considerable scale of investment required by "the AI transformation".
The same day, Meta narrowed its 2026 investment forecast to a range of $135 billion to $145 billion, from $130 billion to $145 billion previously. In the third quarter alone, its capital expenditures, including finance lease repayments, reached $34.91 billion, against operating cash flow of $32.79 billion. Free cash flow was negative at $2.12 billion, compared with a surplus of $10.6 billion a year earlier, while revenue grew 26% to $64.6 billion.
A Class C share distributed to all shareholders
The Form 8-K filed by Meta details the mechanism. The board of directors approved the reform on 19 October, on the unanimous recommendation of a special committee of independent directors. Each holder of a Class A share (one vote) or Class B share (ten votes) will receive one Class C share free of charge, once the new charter is in effect. The release states that the Class A share price should then reflect the effect of a two-for-one split, and that Meta plans to list the new class on Nasdaq.
The distribution does not change anyone's voting power. It does, however, change how Meta will be able to issue capital. A capital increase, an acquisition paid in shares or shares granted to employees may be made through Class C shares, without creating a single additional vote. The amendment to the equity incentive plan, adopted at the same time, adds Class C shares to the securities that may be granted.
As of 22 October, the SEC's EDGAR database contains only the preliminary version of the information statement (PRE 14C), and the record and payment dates for the stock dividend remain to be set by the board.
Hundreds of billions to raise, without new votes
Meta has announced neither amount nor timing for issuance. The information statement is more explicit about the need. It reports that the three long-term forecast scenarios presented to the board in May all showed the need to raise "hundreds of billions of dollars" over several years, starting no earlier than autumn 2026. The group says it expects to use Class C shares for issuances "from time to time", depending on market conditions, and management wanted to have them available by the end of 2026.
The special committee notes that Meta currently has sufficient resources for its current needs. It nevertheless considers it prudent to raise funds before others capture available money, citing recent or expected raises by Alphabet, SpaceX, Anthropic and OpenAI. Debt at the scale envisaged by management risked weighing on the credit rating. The absence of voting rights should also make it possible to approach sovereign financial institutions, given US regulations on foreign investment.
Sunset clauses rejected by the founder
The committee, created in February 2026, began by proposing sunset clauses that would have converted Class B shares with ten votes into Class A shares in certain circumstances. Mark Zuckerberg made it known that he would not support any solution that could cause him to lose control or impose such clauses, nor a capital increase in Class A shares that would dilute his votes. The committee's work also drew on the reclassification plan that Meta had already presented in 2016.
As of 1 October 2026, he held 99.8% of Class B shares, representing approximately 60.6% of votes for 13.4% of economic interests, according to the document. The dual-class structure, in place since the IPO, allows him to decide the outcome of virtually all matters submitted to shareholders, from director elections to mergers.
Shareholders did not vote at a meeting. The amended charter was approved on 20 October by written consent of entities controlled by Mark Zuckerberg, which alone represented approximately 56.1% of votes at that date. The statement says in capital letters that no meeting will be held and no vote is solicited, and notes that Delaware law gives opponents no appraisal right allowing them to demand the repurchase of their shares.
Mark Zuckerberg's concessions
In exchange, the founder signed an "alignment agreement" on 20 October. He may freely sell 20% of the Class C shares he will receive, representing 10% of his total economic interest. For the remaining 80%, each Class C share sold must be accompanied by the sale of a Class A or B share, or the conversion of a Class B share into a Class A share, which reduces his votes. These restrictions lapse in tranches of 2.5% per quarter spent full-time in the management team or as executive chairman of the board, and fall away entirely after 32 such quarters, consecutive or not.
Proposition 40, an exceptional wealth tax submitted to California voters on 3 November 2026, weighs on the whole matter. In July, Mark Zuckerberg told the committee chairman that paying it by selling Class B shares could reduce his votes to around 53%, then, in August, before the committee, that he intended to move out of California before the vote. The agreement ultimately requires him, for eight years and as long as he remains in charge, to reside in California or in the state of Meta's headquarters, except for significant unforeseen circumstances. The freely saleable tranche is intended to allow him to pay this tax, if adopted, without reducing his votes.
The executive also withdrew his request for a performance-based compensation programme. It is replaced by additional Class C stock dividends, paid to all shareholders on a one-for-one basis, each time the 30-day average price of the Class C share doubles again (two, four, eight times, and so on, from the reference of $580.60 per Class A share on 10 September 2026, adjusted for the initial dividend), with an annualised yield of at least 10%. The shares received by Mark Zuckerberg on this occasion are exempt from sale restrictions if he still leads the group.
The Google precedent and the question of the discount
Meta is not inventing the formula. In January 2014, Google's board approved a distribution of non-voting Class C shares to its Class A and B shareholders, paid on 2 April 2014, according to accounts filed by Alphabet. The authorisation of this distribution was challenged in court. Under the settlement that ended the litigation, Google paid in 2015 a compensatory payment of $522 million to Class C shareholders, calculated on the price differential that appeared with Class A shares during the first year of listing, and settled mainly in Class C shares.
Meta is counting on liquidity to limit this risk. Distributing one Class C share per existing share from the outset should create a "deep and liquid" market. The document nevertheless admits that, even so, the Class C share "will likely trade at some discount" to the Class A share, which would require issuing more securities to raise the same amount and would dilute all shareholders. The preliminary statement does not describe a compensatory payment comparable to Google's. The charter guarantees Class C shares the same economic rights as Class A and B shares (dividends, mergers, liquidation), and Meta undertakes, in the event of a repurchase of Class A shares, to endeavour to repurchase at least as many Class C shares.
A voting base frozen for future issuances
For a minority shareholder, the distribution is neutral on the dividend date. The effect will be seen in subsequent issuances. Each capital raise in Class C shares will increase capital without widening the voting base, so Mark Zuckerberg's economic stake may fall without his control following. Employees, for their part, could receive part of their compensation in a class of securities that Meta itself expects to trade at a discount.
The charter is to take effect on 19 January 2027. The dividend will be paid no later than five business days thereafter.
Our articles will then appear first in Google Top Stories.