Paying Off

The investment is in AI: data centres, chips and power. Meta expects to spend up to a hundred and forty-five billion dollars on building this year. In the last quarter alone, almost thirty-five billion. And for the first time since 2012, more went out than came in: free cash flow, negative two billion dollars.

Capital spending (property and equipment plus finance-lease principal, Meta's own definition) against operating cash flow, by quarter, from Meta's own filings: in Q3 2026, $34.91bn against $32.79bn. Free cash flow was -$2.12bn in Q3 2026 (+$10.63bn a year earlier), the first negative quarter since Q2 2012 by Meta's own filings. Meta's 2026 capital spending guidance is $135bn to $145bn, narrowed from $130bn to $145bn. Between 31 December 2025 and 30 September 2026, its cash and cash equivalents fell from $35.87bn to $11.22bn, and its long-term debt rose from $58.74bn to $80.92bn.

On the same day, an analyst asked its finance chief about raising money. Her answer: "We don't have any specific financing plans to announce at this time."

Susan Li, Meta's finance chief, was answering a Goldman Sachs analyst's question on capital, by Meta's own transcript. Her answer in full: "We don't have any specific financing plans to announce at this time but we thought it was prudent to establish the appropriate capital structure framework to ensure that we have access to a diverse pool of funding sources." On the same call: "these investments will take longer to generate returns than those in our core business".

Five days later, Meta launched about thirty-five billion dollars of new shares, raised to thirty-seven and a half the next day, and said it planned sixty billion more next year. Close to a hundred billion dollars in all: by Reuters' count, a record. The new shares come with a twist: the sixty billion will be a new class of stock with "no voting rights". Mark Zuckerberg keeps control.

Meta's case, in its own words: its AI investments "are already delivering substantial incremental advertising revenue." The analysts at William Blair: "We expect investors to continue to question the financing and potential for future capital raises."

Meta's launch release says it will fund its investments "through a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital." William Blair, as quoted by Reuters, also said "the financing reinforces both Meta's confidence in the long-term returns from AI investment and the increasingly capital-intensive nature of pursuing that opportunity."

Paying off, says Meta. And now, paid for by its shareholders too.

New shares sold to investors dilute the shares already held; Meta's own prospectus for the preferred stock says it "could result in dilution to our earnings per share". What we couldn't confirm: the final terms. The final prospectus supplements were not yet on the SEC's system when we read the filings on 28 October.