Meta made $64.6 billion in a quarter and still burned cash. Its new non-voting shares are meant to help pay for that.

Meta’s free cash flow for the third quarter was negative $2.12 billion. A year earlier it was positive $10.63 billion.

Revenue didn’t cause that. Revenue was $64.6 billion, up 26%, and the company’s own cash from operations rose to $32.79 billion. The hole came from spending on servers and data centers: $33.94 billion on property and equipment, plus $0.96 billion in finance lease payments. Those two lines together are larger than everything the business generated in cash.

That’s from Meta’s October 21 earnings release, and it is the number the market chose to care about. Shares fell almost 7% on October 22, and CNBC reported that the cost of insuring Meta’s five-year debt against default hit a record.

Where the money went

Capex for 2026 is now guided to $135 billion to $145 billion, narrowed from $130 billion to $145 billion. Only the floor moved, but a floor going up is still news when the ceiling was already huge.

Over nine months, Meta spent $83.06 billion on property and equipment, against $48.31 billion in the same stretch of 2025. Free cash flow for those nine months is $11.05 billion, down from $29.51 billion.

Two other lines in the cash flow statement tell the rest. Meta bought back no Class A stock this year, after $26.25 billion of buybacks in the first nine months of 2025. And it borrowed $24.91 billion in new long-term debt. On the earnings call, the CFO put cash and securities at $82.4 billion and debt at $83.7 billion, so those are about even.

There’s also a $9.89 billion legal charge in the quarter, tied to an August agreement with state attorneys general. That’s why the operating margin printed at 20%, and the company says it would have been 35% without it. I’m treating it as a separate story. The cash problem would exist without it.

What the new non-voting shares do

Meta’s board approved a new, publicly listed class of non-voting Class C common stock, effective January 19, 2027. Every holder of Class A or Class B gets one Class C share per share held. Meta says it expects the Class A price to reflect a two-for-one split afterward, and that voting power doesn’t change.

So for existing holders, it looks like a split. The release is more direct about why the class exists. Meta lists “capital raising, employee compensation, potential acquisitions, and other general corporate purposes,” and says the scale of AI investment is “significant.”

Why non-voting? Zuckerberg controls the company through his voting shares, and a big sale of ordinary voting stock would shrink his stake in that control. Selling a lot of new Class C stock raises money without diluting that control. The release says the structure “will continue the founder-led model.” The company also signed a Founder Alignment Agreement with him covering how he can sell his Class C shares. I’ve only seen that described in the release and a summary of the 8-K, not the filing itself, so I won’t characterize its terms.

What I can’t tell you

Meta hasn’t said it will sell Class C stock. Not how much, not when. The release gives it the ability, and reasons. Reporters and analysts who linked the new shares to funding the buildout are reading intent into a corporate action, which is fair, but it’s still a reading. I’d want to see an offering before calling it a plan.

I also don’t think the market’s reaction proves the spending is a mistake. Ad revenue grew 26% and price per ad rose 14%, which suggests the AI-driven ad systems Meta keeps citing are working. What’s unproven is whether $140 billion a year earns that back. Nobody outside Meta can check that from a quarterly release.

My take, for what it’s worth: the story isn’t that Meta ran short on money. It has $82 billion in the bank. It’s that a company this profitable no longer pays for its AI buildout out of one year’s cash, and it has now rewritten its share structure to leave room for outside money. Anthropic’s IPO paperwork shows a similar squeeze at a different scale, with a very different business behind it.

The next hard data points are Meta’s January earnings, for fourth-quarter free cash flow, and the January 19 effective date for Class C.

Sources

1. Meta Reports Third Quarter 2026 Results, Announces Establishment of New Class C Common Stock (Meta Investor Relations)
2. Meta stock sinks nearly 7% as AI spend pushes free cash flow negative (CNBC, October 22)
3. Meta Q3 2026 earnings report: live updates (CNBC, October 21)
4. Meta Q3 2026 earnings call transcript (Motley Fool)