Meta upsizes stock sale to $37.5 billion as Nvidia and AMD commit $4 billion

Meta Platforms said early on Oct 27 that it priced its stock sale after raising the Class A common stock portion to $25 billion from $22.5 billion, at $625.00 a share. Chip suppliers Nvidia and Advanced Micro Devices (AMD) separately committed to invest $3 billion and $1 billion in the offering, firming up the interest they had signalled at the launch.

Together with $12.5 billion of mandatory convertible preferred stock, the two offerings now total $37.5 billion. The upsizing lifts Meta's overall equity plan, including the planned at-the-market program, to $97.5 billion, Reuters reported.

The pricing

The forward sale agreements with Morgan Stanley and Goldman Sachs initially cover 40 million Class A shares.

The underwriters' 30-day option on the common stock grew to $3.75 billion from $3.375 billion. If both options are exercised in full, net proceeds rise to about $28.7 billion from the common stock and about $14.3 billion from the preferred.

The preferred stock

• The preferred stock pays a 6.50% annual dividend, due quarterly in cash, Meta shares or a mix.
• Each depositary share converts automatically on or about Aug 15, 2029 into between 0.0681 and 0.0800 Class A shares, depending on Meta's share price before that date.
• Once Meta's non-voting Class C stock is issued and other conditions are met, the preferred converts into Class C shares instead.
• Meta has applied to list the depositary shares on Nasdaq under the symbol METAM.

Demand for the shares

Orders for the common stock reached about five times the shares on offer, Bloomberg News reported, citing people familiar with the matter. The $625 price was 2.7% below Meta's close on Oct 23, the last trading day before the launch, according to the report.

More than half of the common shares went to long-term investors and existing shareholders, and the 15 largest buyers received about 70% of them, Bloomberg reported.

The chipmaker stakes

Nvidia said in a release dated Oct 26 that it will invest $3 billion in Meta's equity offering as the two companies widen their work on Muse, Meta's AI agent and family of models. Meta plans to expand its use of Nvidia's Vera Rubin systems and Vera processors and to deploy Nvidia's Spectrum-X Ethernet networking and BlueField-4 hardware.

AMD said on Oct 27 that it will invest $1 billion. Its first Helios rack-scale systems are installed and being tested at Meta, its EPYC server processors support Muse, and its Instinct GPUs run in production for training and recommendation work. Meta will also deploy a custom Instinct GPU built for its workloads.

Under a separate agreement from February, Meta can earn up to 160 million AMD shares if it buys AMD chips drawing six gigawatts of power and AMD's stock reaches set prices up to $600, Stock Titan reported.

What comes next

• Both offerings are expected to close on Oct 29, subject to closing conditions.
• The first quarterly dividend on the preferred stock is due Feb 15, 2027.