Meta Platforms Inc. (NASDAQ:META) will give shareholders a new class of non-voting stock in January, letting CEO Mark Zuckerberg keep control while the company gains a new way to raise money to fund its artificial intelligence buildout.
How Meta’s Class C Shares Work
Meta’s board declared a dividend of one share of Class C common stock for each outstanding share of Class A and Class B common stock, as part of a “recapitalization” that takes effect Jan. 19, 2027
The Class C shares carry no voting rights, Meta said in a filing with the U.S. Securities and Exchange Commission.
Shareholders won’t vote on the change, since entities tied to Zuckerberg and his wife, Priscilla Chan, that hold 56.1% of Meta’s voting power approved it on Tuesday.
Meta said the shares let it raise capital, pay employees and fund acquisitions without diluting voting power, and that it expects to sell Class C stock from time to time.
Market Watchers Weigh in
Helene Meisler, technical analyst at TheStreet, said on X that she applauds the split but that 2-for-1 is “paltry for a $700 stock.”
She added that an 8-for-1 ratio would have been better.
Nicholas Mugalli, CEO and principal of World Trade Securities, saw the plan for “a non-voting currency to fund AI, acquisitions and engineer pay” as a sign of “more capex coming,” with 2026 capex already guided at $135 billion to $145 billion.
An equity investor Sandeep Anand said that “shareholders absorb 100% of the economic dilution of future issuance; Zuckerberg absorbs none of the control dilution.”
Alphabet Inc. took a similar route in 2014, splitting its stock 2-for-1 to create non-voting shares. Nvidia Corp., Apple Inc. and Amazon.com, Inc. have also split in recent years.
Meta Beats Estimates on Revenue and Earnings
For the third quarter, Meta posted revenue of $64.6 billion, beating analyst estimates of $63.37 billion, according to Benzinga Pro. Adjusted earnings were $7.40 per share, beating estimates of $5.74.
Meta expects fourth-quarter revenue of $73 billion to $76 billion versus estimates of $73.74 billion.
Price Action: On Wednesday, shares closed 0.47% higher at $697.52 and rose 2.17% to $712.65 in extended trading on the results announcement that came in after the bell.
Benzinga Edge rankings indicate Meta’s stock has a Momentum score in the 59th percentile and a Growth score in the 74th percentile.
See More: Top Value Stocks
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Harmony Video Production on Shutterstock.com