Meta proposes mandatory convertible preferred offering and $22.5 billion Class A forward sale
No actual financial results are disclosed in this preliminary offering document, so there is no beat, miss or in-line comparison to prior guidance. Meta is offering 250,000,000 Series A depositary shares at $50 each, each representing a 1/20th interest in Series A mandatory convertible preferred stock, with mandatory conversion expected August 15, 2029. The offering is subject to completion; the annual dividend rate, conversion rates, underwriting discounts and net proceeds are blank. Concurrently, Meta expects...
Key takeaways
Offering structure: 250,000,000 Series A depositary shares at $50 each, each representing a 1/20th interest in one share of Series A mandatory convertible preferred stock; Meta intends to apply for Nasdaq listing under “METAM.”
Over-allotment: The underwriters have a 30-day option to purchase up to 37,500,000 additional depositary shares, representing up to 1,875,000 additional preferred shares.
Pricing status: The preliminary prospectus leaves the annual dividend rate, minimum and maximum conversion rates, underwriting discounts, net proceeds, trade date and settlement date blank.
Dividend schedule: Dividends are cumulative if declared and payable quarterly from February 15, 2027 through August 15, 2029; Meta may pay declared dividends in cash or, subject to limitations, Class A or Class C common stock.
Conversion: Mandatory conversion is expected August 15, 2029 based on a 20-trading-day final averaging period; the securities cannot be redeemed at Meta’s option.
Class C recapitalization: Meta’s restated certificate of incorporation is scheduled to become effective January 19, 2027, and the board declared one Class C share per outstanding Class A and Class B share, contingent on effectiveness.
Concurrent forward sale: Meta expects $22.5 billion of Class A forward sale agreements with Morgan Stanley Capital Services LLC and Goldman Sachs & Co. LLC, plus a $3.375 billion option, with settlement expected by November 19, 2027.
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