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# Meta Announces a New Class of Non-Voting Shares, With a Founder Agreement Attached
- URL: https://theainewsfiles.com/meta-class-c-non-voting-shares-founder-alignment-agreement/
- Published: 2026-10-22T13:10:48.000Z
- Updated: 2026-10-22T13:10:48.000Z
- Description: Alongside its third-quarter results on 21 October, Meta announced a new non-voting Class C stock, a one-for-one stock dividend and a Founder Alignment Agreement with Mark Zuckerberg. Here is what the company and the coverage say.
- Author: J E Cowie
- Tags: News

On 21 October 2026, alongside its third-quarter results, Meta announced that its board had approved a new class of publicly listed, non-voting Class C common stock. The company says it will exist from January 2027\. Meta has also entered into a Founder Alignment Agreement with Mark Zuckerberg. The quarter itself carried a large legal charge and negative free cash flow.

## What Meta announced

Meta's press release says the board approved the new class after a unanimous recommendation from a special committee of disinterested and independent directors. The company intends to file an amended and restated certificate of incorporation in Delaware, with an effective date of 19 January 2027.

The board has also declared a one-time stock dividend of one Class C share for each outstanding Class A and Class B share. It is contingent on the new charter taking effect and will be paid after that. Meta says the record and payment dates will be set by the board at a later date. After payment, it expects the market price of Class A stock to reflect the effect of a two-for-one stock split. The release says the dividend will not change any shareholder's voting power, and that Meta intends to qualify the Class C stock for listing on Nasdaq once it is issued.

The release gives the special committee's reasoning. The committee determined the new class "will provide Meta the ability to finance its growth and help the company remain a leader among fierce competition both domestic and international". Meta's press release also says the scale of investment required to compete, sustain growth and expand infrastructure amid the AI transformation "is significant". The Verge reported that the stock will also go toward potential acquisitions and employee compensation.

![Meta's headquarters in Menlo Park, California](https://theainewsfiles.com/content/images/2026/10/shot2_meta-s-headquarters-in-menlo-park-califo.png)

Meta is headquartered in Menlo Park, California.

## Who approved it

The release says the amended charter was approved by shareholder written consent. Yahoo Finance, in a TIKR piece by Gian Estrada, reports that entities tied to Zuckerberg and Priscilla Chan hold 56.1% of the vote and approved the change, so other shareholders did not vote. TradingKey also reports the 56.1% figure and the written consent. Both outlets put Zuckerberg's voting power after the dividend at about 60.6%, on an economic stake of about 13.4%. Yahoo Finance attributes those figures to the information statement.

Founder continuity is one of the reasons the release gives. It says the creation of the Class C stock "will continue the founder-led model that has driven the company's success since its inception".

## The Founder Alignment Agreement

Meta's release says the agreement has terms covering Zuckerberg's sales of the Class C stock he receives in the dividend, his service at the company, and conditions for potential future Class C dividends. The release does not give the terms.

Yahoo Finance's account of the 8-K filing gives these details:

- Zuckerberg can freely sell 20% of his new Class C shares.
- The other 80% are stapled, so selling them generally requires selling or converting a voting share.
- That 80% is released at 2.5% a quarter over 32 qualifying quarters, counting only quarters in which he serves full time on the executive team or as executive chair.
- Meta must pay another one-for-one Class C dividend each time Class C's 30-day average price doubles from a split-adjusted $290.30, provided returns compound at 10% a year.

CNBC, quoting a Meta SEC filing, reports that Zuckerberg committed to remain in California, or any other jurisdiction where Meta keeps its corporate headquarters, for eight years. The commitment holds "unless there are material unforeseen circumstances that would render it prudent or advisable for Mr. Zuckerberg to reside elsewhere". CNBC reports that the filing also says Zuckerberg "could become liable for a significant, multi-billion-dollar tax payment based on his ownership of stock in the Company". CNBC links this to California's Proposition 40 wealth-tax ballot measure.

Yahoo Finance reports that Facebook proposed a similar non-voting Class C split in 2016 and dropped it in September 2017 amid a shareholder lawsuit.

## The quarter behind it

Meta reported third-quarter revenue of $64.6 billion, up 26% year on year. Costs and expenses rose 68% to $51.6 billion. That includes a $9.89 billion charge tied to the August 2026 agreement with 52 state attorneys general over teen mental health and social media litigation. Income from operations was $12.99 billion, and diluted earnings per share were $3.83\. Excluding the charge, Meta says operating income would have been $22.88 billion and diluted EPS $7.40\. Net income was $9.86 billion, up 264%.

Yahoo Finance's TIKR piece links the new share class to Meta's cash flow, saying Meta's numbers show why it may need the cash. Capital expenditures, including principal payments on finance leases, were $34.91 billion in the quarter. Cash flow from operating activities was $32.79 billion, and Meta reported free cash flow of negative $2.12 billion. It held $82.45 billion in cash, cash equivalents and marketable securities at 30 September. Its balance sheet shows long-term debt of $80.92 billion, against $58.74 billion at the end of 2025, and its cash-flow statement shows no Class A repurchases in the first nine months of 2026, against $26.25 billion in the same period of 2025.

For 2026 Meta expects capital expenditures of $135–145 billion, narrowed from $130–145 billion, and total expenses of $175–179 billion. It guided fourth-quarter revenue to $73–76 billion. Meta said it is not providing a full-year 2027 revenue outlook and is still developing its budget and capacity plans for next year.

## What is and isn't settled

The release announces the class, the dividend and the agreement's existence. It does not say how much new Class C stock Meta might issue beyond the initial dividend. Yahoo Finance's piece calls that the open question. CFO Susan Li said on the earnings call that Meta had no specific financing plans to announce but wanted a framework giving it "access to a diverse pool of funding sources", per Yahoo Finance/TIKR. The Verge quoted her as saying on the earnings call that the new class would "expand our funding tools and give us flexibility to invest behind the unprecedented momentum we're seeing across every part of our business driven by AI".

Reports of the after-hours share move on 21 October varied. CNBC said about 2.5%. Yahoo Finance's TIKR piece said 2.17% to $712.65\. Stocktwits's headline said 3% and its text said 5%.

My reading is that this is a financing structure announced ahead of its terms. The company has stated what the stock is for and that the dividend leaves voting power unchanged. The size and timing of any issuance have not been announced.

## Sources

Ali, A. (2026) 'Meta Stock Forecast: Q3 Beat Fades Below $721.79 as Cash Flow Turns Negative', TradingKey, 22 October 2026, available at: [https://www.tradingkey.com/analysis/stocks/us-stocks/262231640-meta-stock-forecast-q3-beat-class-c-shares-cash-flow-686-support-october-22-2026-tradingkey](https://www.tradingkey.com/analysis/stocks/us-stocks/262231640-meta-stock-forecast-q3-beat-class-c-shares-cash-flow-686-support-october-22-2026-tradingkey?ref=theainewsfiles.com) (Accessed: 22 October 2026).

CNBC (2026) 'Meta (META) Q3 2026 earnings report: Live updates', CNBC, 21 October 2026, available at: [https://www.cnbc.com/2026/10/21/meta-earnings-q3-2026-live-updates.html](https://www.cnbc.com/2026/10/21/meta-earnings-q3-2026-live-updates.html?ref=theainewsfiles.com) (Accessed: 22 October 2026).

Estrada, G. (2026) 'Meta's Free Cash Flow Turned Negative. Its New Share Class Opens Another Funding Option.', Yahoo Finance, 22 October 2026, available at: [https://finance.yahoo.com/markets/stocks/articles/meta-free-cash-flow-turned-054033484.html](https://finance.yahoo.com/markets/stocks/articles/meta-free-cash-flow-turned-054033484.html?ref=theainewsfiles.com) (Accessed: 22 October 2026).

Meta (2026) 'Meta Reports Third Quarter 2026 Results — Announces Establishment of New Class C Common Stock', PR Newswire, 21 October 2026, available at: [https://www.prnewswire.com/news-releases/meta-reports-third-quarter-2026-results-302915964.html](https://www.prnewswire.com/news-releases/meta-reports-third-quarter-2026-results-302915964.html?ref=theainewsfiles.com) (Accessed: 22 October 2026).

Nayar, S. (2026) 'META Stock Jumps 3% After-Hours After Q3 Revenue Beats Expectations, With A Narrowed AI Capex Outlook And New Non-Voting Class C Stock', Yahoo Finance (Stocktwits), 21 October 2026, available at: [https://finance.yahoo.com/markets/stocks/articles/meta-stock-jumps-3-hours-212549647.html](https://finance.yahoo.com/markets/stocks/articles/meta-stock-jumps-3-hours-212549647.html?ref=theainewsfiles.com) (Accessed: 22 October 2026).

Roth, E. (2026) 'Meta to create a new class of shares to fund AI push', The Verge, 21 October 2026, available at: [https://www.theverge.com/tech/1015799/meta-shares-class-ai-q3-2026-earnings](https://www.theverge.com/tech/1015799/meta-shares-class-ai-q3-2026-earnings?ref=theainewsfiles.com) (Accessed: 22 October 2026).

## Picture credits

- Top picture: Mark Zuckerberg, Meta's founder and CEO. Mark Zuckerberg, F8 2019 Keynote — photo by Anthony Quintano, [CC BY 2.0](https://creativecommons.org/licenses/by/2.0/?ref=theainewsfiles.com), via [Wikimedia Commons](https://commons.wikimedia.org/wiki/File:Mark%5FZuckerberg%5FF8%5F2019%5FKeynote%5F%2832830578717%29%5F%28cropped%29.jpg?ref=theainewsfiles.com)
- Meta is headquartered in Menlo Park, California. Meta headquarters, Menlo Park — photo by InvadingInvader, [CC BY-SA 4.0](https://creativecommons.org/licenses/by-sa/4.0/?ref=theainewsfiles.com), via [Wikimedia Commons](https://commons.wikimedia.org/wiki/File:Meta%5FHQ%5F2023.png?ref=theainewsfiles.com)