The Class C distribution issues one nonvoting share for each existing Class A or Class B share, acting as a 2-for-1 split on Nasdaq while also giving Zuckerberg stock he can sell to cover a potential multibillion dollar bill from California's proposed Prop 40 wealth tax. In return, Zuckerberg signed an agreement committing to live in California, or wherever Meta is headquartered, for eight years while he remains in a full time leadership role after weighing leaving the state over the tax proposal.
Meta shares pulled back from an after hours high of $748.80 to $712.40 after the CFO warned that "significant investment" will drive up serving costs and the company raised the floor of its 2026 capital expenditure forecast to $135B to $145B, implying $49B to $59B of fourth quarter spending. Third quarter revenue rose 26% to $64.6B, beating the $63.33B consensus estimate, while total costs and expenses jumped 68% to $51.61B, including $9.89B from an $18.6B teen mental health settlement with 52 state attorneys general that cut operating margin to 20% from 40% a year earlier and alongside $34.91B in capital spending pushed free cash flow to negative $2.12B for the first time since 2012.