Meta Just Priced a Stock Sale at $625 a Share. I'd Consider Buying at the Same Price.
Key PointsMeta priced 40 million Class A shares at $625 each in a common stock offering it upped to $25 billion.
Meta Platforms priced 40 million Class A shares at $625 each and 250 million depositary shares of mandatory convertible preferred stock at $50 on Oct. 26, raising about $37.5 billion in new equity. The preferred stock offers a 6.5% annual dividend. While the stock is currently near $625, down over 20% from its August 2025 high of $790, the cost of new shares may be lower than the $37.5 billion figure suggests.
Meta expects to receive the proceeds from the forward sale agreements by Nov. 19, 2027. The preferred stock pays an annual dividend of around $813 million. The company plans to use the cash for general corporate purposes, including competing with industry trends, expanding infrastructure, and pursuing new strategic initiatives. With the new shares and potential conversion from preferred stock, Meta's share count would increase by 2.3%, diluting each share's piece of future profits.
However, the stock trades at about 18 times expected 2027 earnings, maintaining a price-to-earnings ratio under 19 times. Meta's advertising revenue grew 26% year-over-year to $63.1 billion in the third quarter, and the company's AI investments are reportedly delivering substantial incremental advertising revenue. Despite the dilution and increased debt, I believe Meta stock is a buy near $625.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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