- Meta’s board approved a new non-voting Class C stock alongside its third-quarter earnings, which will be distributed to Class A and B shareholders starting Jan. 19, 2027, effectively functioning as a two-for-one stock split.
- The non-voting structure allows the company to sell equity or make acquisitions without diluting Mark Zuckerberg’s voting power, who commands roughly 60.6% of the vote against a 13.4% economic interest.
- Management forecasts presented to a board committee showed a theoretical need for “hundreds of billions of dollars” in equity, though CFO Susan Li clarified the company has no current plans for such financing.
- A Founder Alignment Agreement restricts Zuckerberg from freely selling 80% of his Class C shares and requires him to maintain California residency for eight years, a condition that could expose him to significant tax liabilities under Proposition 40.
The board of Meta approved a new class of non-voting stock alongside its third-quarter results, with existing shareholders set to receive one Class C share for every Class A or B share they own starting Jan. 19, 2027. The non-voting structure allows Meta to raise capital and pursue acquisitions without diluting the voting power of founder Mark Zuckerberg, who beneficially owns roughly 341 million Class B shares giving him 60.6% of the vote against a 13.4% economic interest. According to an SEC filing, advisers from Moelis told a board committee the company could raise about $700 billion in equity before Zuckerberg’s voting power fell below 50%, and management forecasts showed a theoretical need for “hundreds of billions of dollars.” CFO Susan Li described that language as “a theoretical maximum” on a follow-up call with analysts, saying Meta has “nothing to announce” on equity financing. Under a Founder Alignment Agreement, Zuckerberg can freely sell only 20% of his Class C shares; selling the other 80% requires him to convert or sell matching Class A or B shares, which directly trims his voting power. The agreement also commits him to California residency for eight years, a provision that could trigger a multi-billion dollar payment under Proposition 40 and potentially cut his voting interest to roughly 53%. Additional Class C dividends are tied to stock price milestones, though the filing warns the shares will likely trade at a discount to Class A shares and do not count as voting stock under Section 368(a) of the tax code.
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