Meta is making significant strides in artificial intelligence (AI) and has announced the creation of a new class of stock to help finance this initiative. On Wednesday, during the company's third-quarter earnings report, Semafor revealed that Meta might issue non-voting stock, which would not grant shareholders a vote on company decisions.
Earnings Call Highlights
During the earnings call, Susan Li, Meta's chief financial officer, confirmed the report, stating that the company plans to "create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend." She emphasized that this new class of shares aims to facilitate capital raising, employee compensation, acquisitions, and other corporate purposes while preserving the voting power of existing Class A and B shareholders.
Li added that these shares would help maintain Meta's "founder-led structure" and provide flexibility to invest in the company's ongoing momentum driven by AI.
Financial Performance
Meta's financial performance for the past quarter exceeded Wall Street expectations, with the company reporting $64 billion in revenue, marking a 26% increase from the previous year. However, costs and expenses also rose by 68% year over year. The Reality Labs division, responsible for Meta's augmented reality (AR) glasses, virtual reality (VR) headsets, and software, continues to incur losses, although these have decreased. The company anticipates that losses in this division will shrink to between $18 billion and $19 billion by 2025.
