Li described the purpose as providing a publicly traded financing instrument that could support multiple corporate activities while preserving Meta's “founder-led structure.” She said the additional flexibility would help the company continue investing in its businesses as artificial intelligence drives expansion.
The new stock is expected to take the form of Class C shares, with distribution planned for January 2027. Under the proposed arrangement, investors would receive one Class C share for every existing Class A or Class B share, producing an economic effect similar to a two-for-one stock split. Shareholders would hold more shares, but the distribution would not automatically increase the value of their investments.
The distinction between voting and non-voting stock is particularly important at Meta, where CEO Mark Zuckerberg maintains control through Class B shares carrying greater voting power. Issuing additional non-voting stock would give Meta a way to compensate employees, finance acquisitions or attract investors without diluting that control.
Meta has also established a Founder Alignment Agreement with Zuckerberg covering his Class C holdings and potential future distributions. The structure reflects the company's intention to preserve its current governance arrangement while expanding the financial resources available for investment.
The announcement comes alongside a substantial increase in Meta's spending. The company reported third-quarter revenue of approximately $64 billion, up 26% from the previous year and ahead of Wall Street expectations. Operating costs and expenses, however, climbed 68% over the same period.
Meta expects capital expenditures of $135 billion to $145 billion for 2026 as it expands the infrastructure supporting its AI operations. Its purchases of property and equipment increased from $18.83 billion to $34.91 billion during the third quarter, while free cash flow moved from a positive $10.63 billion a year earlier to negative $2.12 billion.
Despite those expenditures, Meta ended September with $82.45 billion in cash, cash equivalents and marketable securities. Its advertising business also continued growing, with ad impressions increasing 10% and average advertising prices rising 14%.
The company's Reality Labs division remains another significant source of expenses. Responsible for augmented reality glasses, virtual reality headsets and related software, the unit continues operating at a loss. Meta expects those losses to narrow from 2025 levels to between $18 billion and $19 billion.
Meanwhile, Meta has accelerated development of its Muse AI products. Earlier releases included Muse Spark and Muse Glimmer, followed more recently by Muse Wonder and Muse Spark Open, an open-weight model that makes its underlying parameters available to outside developers. The company has also introduced Muse Code, an AI agent designed to assist with software development across large codebases.
Meta has placed particular emphasis on Muse, its personal AI agent. At this year's Meta Connect event, the company introduced a collection of animated avatars intended to make interactions with the assistant more approachable.
During the earnings call, Zuckerberg reported that more than 10 million people across the United States and Canada had created Muse personal agents within approximately six weeks of availability. He also said the product had occupied the top position in Apple's App Store on nearly every day during that period.
With that initial adoption, Meta is shifting its attention toward expanding the service. Zuckerberg said the company now considers Muse to have established product-market fit and is concentrating on scaling its operations, with an eventual ambition to reach billions of users.
That expansion carries additional costs. Zuckerberg acknowledged that operating Muse is more expensive than many previous Meta products, contributing to the company's consideration of earlier monetization. The proposed non-voting shares would provide another financing option as Meta continues developing and supporting its AI services.
Beyond its investment plans, Meta warned that ongoing legal and regulatory matters could affect its financial performance. Li pointed to continued scrutiny involving younger users across multiple markets, along with several U.S. trials concerning youth-related issues scheduled for the coming months.
For investors, the proposed stock structure introduces a distinction between financial ownership and corporate influence. Future Class C shareholders would hold an economic interest in Meta without receiving voting rights, while existing Class A and Class B shareholders would retain their current voting authority.
Meta's proposal would therefore expand the ways it can finance acquisitions, compensate employees and support capital-intensive projects without altering its established voting structure. The move comes as the company reports strong revenue growth alongside sharply rising expenses tied to its expanding AI operations.
This analysis is based on reporting from TechCrunch & Yahoo Finance courtesy of TheStreet.
Image courtesy of Crypto Briefing.
This article was generated with AI assistance and reviewed for accuracy and quality.
