Shares in Meta Platforms tumbled on Wednesday after a report emerged that the social media giant is weighing a major equity raise, potentially worth tens of billions of dollars. The stock fell 4.3% to $485.60 in afternoon trading on the Nasdaq, wiping billions from the company’s market capitalisation. The move, if confirmed, would mark Meta’s first public equity offering since its 2012 IPO.
According to a report from Bloomberg, citing sources familiar with the matter, Meta is exploring raising between $30bn and $35bn to fund its ambitious artificial intelligence infrastructure plans. The company has been ramping up spending on data centres, chips and research to compete with rivals such as Google and Microsoft in the AI arms race. Meta’s capital expenditure for 2024 is expected to reach $35bn to $40bn, up sharply from previous years.
The news has rattled investors who fear dilution of existing shares. “An equity raise of this magnitude would significantly increase the share count, putting pressure on earnings per share in the near term,” said Sarah Chen, an analyst at Hargreaves Lansdown. “For UK investors holding Meta through pension funds or ETFs, the immediate impact is a potential drop in portfolio value, though the long-term AI strategy could pay off.”
The broader tech sector also felt the ripple effect, with the Nasdaq 100 slipping 0.8% on the day. The FTSE 100, which has a heavy weighting of commodity and financial stocks, was less affected, closing flat at 8,214 points. However, UK pension funds with significant US tech allocations—common in many default growth funds—could see short-term volatility. Meta is a top-10 holding in many global equity ETFs popular among British savers.
Market commentators noted that Meta’s move reflects a broader trend among tech giants to raise capital for AI investment rather than relying solely on cash flow. “This is a sign that even cash-rich companies are seeking external funding to avoid slowing down their AI ambitions,” commented James Harding, a market strategist at AJ Bell. “For UK investors, it underscores the importance of understanding how their pension funds are exposed to these mega-cap tech companies.”