Meta Platforms, Inc.

Meta Platforms agreed to sell 250,000,000 depositary shares, each representing a 1/20th interest in a share of 6.50% Series A Mandatory Convertible Preferred Stock ($1,000 liquidation preference per preferred share), and the offering closed October 29, 2026. Separately, it entered forward sale agreements covering 40,000,000 Class A shares at an initial forward price of $622.91875 per share, with no initial proceeds to Meta. The preferred converts automatically around August 15, 2029 into 1.3620 to 1.6000 Class A shares per preferred share, and it restricts common dividends and buybacks while dividends are unpaid.

1. 1.Meta issued 250,000,000 depositary shares (1/20th of a preferred share each) of 6.50% Series A Mandatory Convertible Preferred Stock, with a 37,500,000-share over-allotment option exercisable within 30 days; the offering closed October 29, 2026.
2. 2.Meta entered forward sale agreements for 40,000,000 Class A shares at an initial forward sale price of $622.91875, settleable at Meta's discretion on or before November 19, 2027, with a 6,000,000-share underwriter option.
3. 3.Meta will receive no proceeds from the forward sales initially; shares are issued to the forward purchasers only at settlement at the then-applicable forward price.
4. 4.The preferred pays 6.50% cumulative dividends, in cash, Class A stock or a combination, quarterly from February 15, 2027 through August 15, 2029, and mandatorily converts into 1.3620-1.6000 Class A shares per preferred share (0.0681-0.0800 per depositary share).
5. 5.Preferred terms restrict dividends on, and repurchases of, common and junior stock while accumulated dividends on the preferred are unpaid.
6. 6.Terms anticipate a new Class C common stock under an amended charter filed October 21, 2026; once issued, the forward agreements and preferred conversion and dividend mechanics can reference Class C shares.

1. 1.Future Class A share issuance upon mandatory conversion (up to 1.6000 shares per preferred share) and forward settlement (40,000,000 shares plus any option) will dilute existing common shareholders.
2. 2.Dividend and repurchase restrictions on common stock apply whenever accumulated preferred dividends are unpaid, which constrains capital return flexibility.
3. 3.The 6.50% cumulative dividend creates a fixed claim on cash or share issuance, and the preferred ranks ahead of common stock in liquidation.
4. 4.Forward purchasers can accelerate settlement and force Meta to settle on their chosen date upon events such as inability to borrow shares or at an acceptable stock loan rate, dividends above specified amounts, extraordinary events like mergers, tender offers or delisting, or defaults including bankruptcy.
5. 5.The forward sale price decreases daily if the overnight bank funding rate falls below the spread, and it is reduced by specified per-share amounts and potentially by Class A/Class C trading price differences if settled in Class C stock, which reduces proceeds to Meta.
6. 6.The introduction of Class C stock adds structural complexity, since conversion rates, dividend payment and forward settlement terms depend on its issuance and on price differences between share classes.