Meta Shares Drop 6% Following Negative Free Cash Flow and Increased AI Capital Expenditure Forecast
Meta Platforms shares fell approximately 6% on Thursday after reporting a negative free cash flow of $2.12 billion for the third quarter. The decline was driven by investor concerns regarding the company's aggressive pivot toward artificial intelligence, which has necessitated a significant increase in capital expenditure projections. Meta raised its full-year capex guidance to a range of $135 billion to $145 billion. Despite the cash flow challenges, revenue grew 26% year-over-year to $64.60 billion, exceeding analyst expectations. The company also announced plans to create a new class of nonvoting Class C common stock to maintain its founder-led structure and facilitate growth financing. Additionally, credit default swap spreads reached all-time highs, signaling heightened investor concern regarding the company's credit profile amid heavy spending.
Tickers: $META
Topics: capital expenditure credit default swaps earnings report free cash flow stock class restructuring tax implications
Part of the story Meta Announces New Non-Voting Share Class to Fund AI Infrastructure and Acquisitions (4 articles)