Meta's Filing Makes 20% of Zuckerberg's New Class C Shares Freely Saleable and Ties the Rest to His Voting Stock

Updated October 22, 2026 (afternoon): Meta's preliminary information statement, filed with the SEC on October 21, sets out how the Class C shares were approved and how Zuckerberg's own shares are restricted. The new section directly below covers it; the morning report follows, unchanged except that its headings now sit one level lower under a dated section.

October 22 afternoon: Meta's information statement sets out the Class C terms

By Meta's own account, most of the Class C shares Mark Zuckerberg will receive cannot be turned into cash without him also giving up votes. The company's preliminary information statement says he "generally cannot obtain liquidity in a significant majority of the non-voting Class C common stock that he will receive in the Dividend without a corresponding reduction in his voting power."

The filing says seven Chan Zuckerberg holding entities, which together owned Class B shares carrying about 56.1% of the voting power, approved the restated charter by written consent on the October 20 record date, so no shareholder meeting will be held. It says the support of Class A holders was not required, in part because Zuckerberg, through his Class B shares, can approve the change unilaterally. The charter is to take effect on January 19, 2027, and the board has declared a dividend of one Class C share for each Class A and Class B share, to be paid no later than the fifth business day after that, with record and payment dates to be set later.

Under the Founder Alignment Agreement, 20% of the Class C shares going to Zuckerberg's holder group will be freely saleable. The other 80% are "Stapled Class C Shares": for each one sold, the group generally must, within two business days of settlement, sell a Class A or Class B share, convert a Class B share into Class A, or apply credits the agreement defines. Stapled shares are released at 2.5% of the group's dividend shares at the end of each full calendar quarter in which Zuckerberg serves full time on the executive team or as executive chair; the quarters need not be consecutive, and all remaining stapled shares are released after the 32nd such quarter.

The board has also agreed to declare further one-for-one Class C dividends to all holders after each "Doubling Event," defined as the Class C stock's 30-day volume-weighted average price reaching 2x, then 4x, then 8x and so on of the Class A price of $580.60 on September 10, 2026, as adjusted, provided the compound annualized shareholder return since that date is at least 10%. A special committee of Robert M. Kimmitt, its chair, Charles Songhurst and Tony Xu, advised by Skadden, Arps, Slate, Meagher & Flom and Moelis & Company, unanimously found the charter, dividend and agreement fair and advisable, the filing says.

Limits of the October 22 afternoon update

• The terms above are Meta's description in a preliminary information statement; as of 09:13 UTC on October 22, EDGAR showed no definitive statement. We have not seen independent analysis of the filing.
• Note, October 22: the information statement that the morning report says Meta would publish had already been filed on October 21; we have not reviewed the accompanying Form 8-K.

Original report: Q3 results and the Class C plan, October 22 (morning)

By Meta's own description, it is creating a new way to pay for its AI buildout without loosening Mark Zuckerberg's control. With third-quarter results on Wednesday, October 21, Meta said its board had approved a publicly listed, non-voting Class C common stock, effective in January 2027, that it can use "for capital raising, employee compensation, acquisitions, and other general corporate purposes," in the words of CFO Susan Li on the earnings call, as reported by TechCrunch. The same release showed quarterly capital expenditure of $34.91 billion and negative free cash flow.

How the new share class works

Meta says the board acted on the unanimous recommendation of a special committee of disinterested and independent directors, which concluded that the investment needed to compete in AI "is significant" and that the new class "will provide Meta the ability to finance its growth." The board declared a one-time stock dividend of one Class C share for each Class A and Class B share, to be paid after an amended certificate of incorporation takes effect on January 19, 2027; record and payment dates are still to be set. Meta says it expects the Class A price to then reflect the effect of a two-for-one stock split, that the dividend will not change any shareholder's voting power, and that it intends to list the Class C shares on Nasdaq.

Meta has also signed a Founder Alignment Agreement with Zuckerberg covering his sales of the Class C shares he receives, his service at the company, and conditions for any future Class C dividends. Li said the structure preserves "the voting power of existing Class A and B shareholders," TechCrunch reports. Meta says more detail will come in a Form 8-K and an information statement.

The quarter, in Meta's figures

Measure	Q3 2026, per Meta
Revenue	$64.60B, up 26%
Costs and expenses	$51.61B, up 68%, including a $9.89B legal charge
Income from operations	$12.99B, down 37%
Capex, including finance-lease principal	$34.91B
Operating cash flow	$32.79B
Free cash flow (non-GAAP)	negative $2.12B

The $9.89 billion charge relates to Meta's agreement with 52 state attorneys general to resolve teen mental-health litigation, which Meta says provides for payments of up to about $18.59 billion; excluding it, Meta says operating income would have been $22.88 billion. Business Insider reports second-quarter capex was $31.08 billion.

Meta guided fourth-quarter revenue to $73–76 billion and full-year 2026 expenses to $175–179 billion. It now expects 2026 capex of $135–145 billion, "narrowed from our prior outlook of $130-145 billion," and Reality Labs losses of $18–19 billion this year and about $15 billion next year. For 2027 it gave no capex figure, saying it expects "to continue investing aggressively." Business Insider reported the stock up 4.12% after hours at the time of its publication.

Muse, by Zuckerberg's numbers

"In just a month and a half, more than 10 million people in the U.S. and Canada have set up Muse personal agents," Zuckerberg said on the call, per TechCrunch. TechCrunch also reports he said about 25% of people who set up Muse now use it daily, and that Meta expects to improve Muse's cost efficiency "by more than 10x in the next year." Meta released Muse Wonder, its first frontier model, on October 12, and we reported on October 21 that it had paused Muse chat sharing after a security firm found exposed share links.

Limits

• The Muse user, daily-use and cost figures are Meta's, stated on the earnings call and reported by TechCrunch; they cover the US and Canada, and the cost improvement is a target.
• Meta has not said how much Class C stock it might sell or when; the record and payment dates for the dividend are not set.
• Free cash flow is a non-GAAP measure as defined by Meta.

Sources

• SEC EDGAR: Meta Platforms preliminary information statement, Schedule 14C (filed October 21, 2026)
• Meta Investor Relations: Meta Reports Third Quarter 2026 Results (October 21, 2026)
• TechCrunch: Meta wants to pay for its broad AI buildout with a newly created class of stock (October 21, 2026)
• TechCrunch: Meta says Muse has over 10M users, with shopping a top activity (October 21, 2026)
• Business Insider: Meta Narrows Capex Forecast As It Leans Into the AI Agent Wars (October 21, 2026)
• Times of AI: Meta Releases Muse Wonder, Its First Frontier Model, and Artificial Analysis Puts It Two Points Off the Top (October 13, 2026)
• Times of AI: Meta Pauses Muse Chat Sharing After Researchers Find About 6,800 Share Links Through Public DNS (October 21, 2026)