Meta Launches $95B Equity Raise, Copying Alphabet's Playbook
META sits 24% above its 52-week low of $520.26.
Summary
Meta is raising $95 billion in equity: $35 billion now ($22.5 billion class A common plus $12.5 billion mandatory convertible preferred) and a $60 billion at-the-market class C program once the January stock split creates that class. The mandatory preferred is expected to yield 6%-6.5% with a roughly 20% conversion premium and trade as METAM. Nvidia, AMD and Broadcom have committed $5 billion as cornerstone investors. The deal is patterned on Alphabet's $85 billion June financing, led by the same banks, Morgan Stanley and Goldman Sachs; Alphabet's mandatory convertibles (GOOGM, GOOGN) now trade near $46 versus their $50 issue price after its common stock fell. Meta shares slipped 1.1% to $635.37 early Monday, adding to last week's roughly 7% drop after the company signaled the class C structure. The offering removes the overhang of an unknown raise size but confirms heavy dilution and a large supply of new paper hitting the market; pricing terms are undisclosed and the deal could price as early as today.
At the time of this announcement, META was trading at $643.53 on NASDAQ in the Technology sector, with a market capitalization of approximately $1.6T. The 52-week trading range was $520.26 to $779.82. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.