Meta SEC filing reveals debt securities offering plans

Tech giant Meta, the parent company of Facebook, Instagram and WhatsApp, submitted a filing to the United States Securities and Exchange Commission (SEC) for new debt shelf offerings. 

The Big Tech company filed the prospectus on May 1, saying that it “may, from time to time, offer and sell debt securities in one or more series.” The statement continued to say each time a debt security is sold, it will issue a new “prospectus supplement” containing the “specific terms of the debt securities offered.”

Debt shelf offerings, or debt securities, are a provision that grants the issuer (i.e., Meta) the ability to register a new issue of securities without the need to sell the entire issue at once.

Additionally, the filing stated that debt securities may be offered and sold to or via “underwriters, brokers, dealers, or agents as designated from time to time, directly to one or more other purchasers, or through a combination of such methods.“

The filing did not disclose the exact amount of debt securities being offered.

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Shelf offerings have the potential to be helpful to investors by occasionally giving insights into a company’s game plan for raising capital. On the other hand, new shares could also potentially negatively impact the price of current shares.

On Twitter, the community responded by trying to connect the dots to Meta’s recent spending on AI development and buybacks as a potential reason for the new alternative funding sources. 

They need money for AI

— kenyinkz (@kenyinka) May 1, 2023

This filing also comes shortly after Meta released its latest earnings report, revealing a nearly $4 billion loss from its metaverse unit. This loss follows a deficit of $14 billion over the last year, with Zuckerberg anticipating more to come in 2023. 

Nevertheless, sources close to Meta recently shared that the company offers its metaverse developers salaries of anywhere from $500,000 to $1 million a year.

In August 2022, Meta raised $10 billion in its first-ever bond offering to fund share buybacks and business investments.

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