PomegraMeta Stock Falls 7% After New Share Class Plan
Why did Meta stock fall 7%?
Meta (META) stock fell 7% to $648.85 on Thursday after the company said it will create a new share class to fund AI spending, as free cash flow turned negative.
Key numbers
| Meta close (Oct 22) | $648.85-6.98% |
|---|---|
| Nasdaq Composite | 26,008.86-2.60% |
| Nvidia close | $212.21-4.40% |
| Meta 2026 spending plan | $135B–$145Bcapex raised |
| Meta future commitments | ~$825BAI data centers, leases |
| Meta Q3 free cash flow | -$2.1Bfirst negative since 2012 |
What happened
Meta (META) stock fell 7% to $648.85 on Thursday after the company said it will create a new share class to fund AI spending, as free cash flow turned negative. Meta reported third-quarter sales of $64.6 billion, but its free cash flow (cash left after spending) turned negative for the first time since 2012. It expects to spend $135 billion to $145 billion this year and has about $825 billion in future commitments. Nvidia CEO Jensen Huang also told CNBC there is "a scarcity of capital" for AI buildouts, and the Nasdaq fell 2.6%, its worst day since June.
Why it matters
Meta is now spending on AI faster than it earns cash, and it is turning to new nonvoting shares (shares without a vote on company decisions) to help pay for it. Huang's comment adds to worries that money for AI projects is getting harder to find. That can slow spending by big tech firms, and it has already hit chip makers and other AI-linked stocks. Hedge funds also posted some of their worst losses since the COVID-era slump.
Who this affects
- MarketbearishHigh impact
- Tech investors lost ground; Nasdaq had its worst day since June.
- CompanybearishHigh impact
- Meta shareholders face a 7% drop and negative free cash flow.
- CompetitorsbearishMedium impact
- Amazon, Alphabet and Microsoft also fell as AI funding worries spread.
- IndustrybearishMedium impact
- Chip makers and AI builders face tighter, costlier funding.
Meta vs Amazon, Microsoft, Alphabet
How we got here
Meta closes down 6.98% at $648.85 after Q3 results and Class C share plan.
Nasdaq falls 2.6%, worst day since June 5; Nvidia drops 4.4%.
Hedge funds report some of their worst losses since the COVID-era slump.
Meta's 2-for-1 split creating nonvoting Class C shares takes effect.
What to watch
- Whether chip and AI stocks keep falling after their worst day since June 23.2026-10-26
- Meta's Q4 sales forecast of $73B–$76B versus about $73.7B analysts expected.Q4 2026
- Meta's Class C share split taking effect.2027-01-19
Educational content only. Not investment advice.
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