Meta prices its record stock sale at $625 a share, and Nvidia is putting in $3 billion
Meta upsized its common stock sale to $25B and sold $12.5B of convertible preferred. Its plan now totals $97.5B, with $3B from Nvidia.
The skim
- Meta priced its stock sale overnight: $25 billion of Class A common stock at $625 a share, up from the $22.5 billion it announced Monday, plus $12.5 billion of mandatory convertible preferred stock. Both offerings are set to close Oct. 29.
- With a planned at-the-market program of up to $60 billion, the total fundraising plan is now $97.5 billion, the company's largest ever.
- Nvidia says it will put $3 billion into the offering as part of a deeper partnership on Muse, Meta's AI agent. That puts a chip supplier on the cap table of one of its biggest customers.
The terms
The common stock is being sold through forward sale agreements with Morgan Stanley and Goldman Sachs, covering 40 million shares, according to Meta's pricing announcement. Meta doesn't get the cash up front. It expects to settle the forwards on or before Nov. 19, 2027, for about $24.9 billion in net proceeds at an initial forward price of roughly $622.92 a share.
The second piece is 250 million depositary shares at $50 each, representing 6.50% Series A mandatory convertible preferred stock, for about $12.5 billion net. Each depositary share converts into between 0.0681 and 0.0800 Class A shares around Aug. 15, 2029. Meta plans to list them under the ticker METAM. Underwriter options could lift the totals to about $28.7 billion and $14.3 billion.
The $60 billion at-the-market program comes later, once Meta's new non-voting Class C shares start trading, expected in the first quarter of 2027.
Nvidia's $3 billion
In a separate announcement, Nvidia said it would invest $3 billion in the equity offering. The two companies will work together on training and inference for Muse and its family of models, and Meta will expand its use of Nvidia's Vera Rubin systems, Vera CPUs, Spectrum-X networking and BlueField-4. "AI agents represent a new computing paradigm," Nvidia CEO Jensen Huang said. On Monday, Meta said Nvidia, AMD and Broadcom together were interested in buying up to $5 billion of shares.
It's Nvidia's latest stake in a customer. It has backed OpenAI, Anthropic, Intel and xAI, and has taken part in 121 investment rounds this year, according to Dealroom data cited by CNBC. Both stocks were flat in premarket trading Tuesday.
Why it matters
Meta is selling stock because the cash pile no longer covers its AI buildout. It burned $2.12 billion of free cash flow in the third quarter, its first negative quarter in more than a decade, and has about $825 billion in future spending commitments against $82.45 billion in cash and securities, RTÉ reports. Capital spending this year is forecast at $135 billion to $145 billion.
For shareholders, that means dilution now and possibly more later. "We expect investors to continue to question the financing and potential for future capital raises," William Blair analysts wrote. Nvidia's check adds to concerns about circular financing, with chipmakers funding the customers that buy their chips. Meta isn't the only AI giant raising outside money for compute. SpaceX just lined up a $40 billion GPU leasing deal, and Anthropic has filed to go public. Next up: the offerings close Thursday, and the bigger question is how fast Meta draws on the $60 billion program next year.
