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Meta's board approved a new non-voting Class C common stock class, effective January, which the company says will fund capital raising, employee pay and acquisitions tied to its AI push. The New York Times reports an SEC filing shows the plan was also shaped by CEO Mark Zuckerberg's concerns about California's proposed Proposition 40 billionaire tax, which could impose a one-time 5% levy on billionaires' net worth.
Meta disclosed in a quarterly filing that it created a new class of non-voting stock, effective January, that could help offset taxes Zuckerberg would owe if California's Proposition 40 billionaires tax passes on Nov. 3. In exchange, Zuckerberg has committed to remain a California resident for eight years, with exceptions for unforeseen circumstances. The 5% tax would apply to Californians worth over $1 billion; Zuckerberg's net worth is about $225 billion.
A jury found Meta liable for nearly 44 million violations of New Mexico's consumer protection law, and US District Judge Francis J. Mathew imposed a $25 billion penalty, the largest ever levied against the company. New Mexico Attorney General Raúl Torrez had rejected an $18 billion multistate settlement Meta reached with other states earlier this year and pursued the case separately, seeking up to $40 billion. Mathew's ruling cites trial evidence that Meta's leadership, including Mark Zuckerberg, knew the company was misleading the public about data control, misinformation and other practices since 2010.
Meta has reached an agreement allowing Mark Zuckerberg to sell shares without losing control of the company, aimed at keeping him in California if a proposed billionaire tax passes. The measure, a one-time 5% levy on residents worth over $1bn, goes before California voters on 3 November. Zuckerberg had warned Meta's board he was considering moving his primary residence out of the state.
Meta's stock fell about 6% after third-quarter results showed negative free cash flow of $2.12 billion and a raised capital expenditure floor, now projected at $135-145 billion for the year. Revenue rose 26% year-over-year to $64.60 billion, beating estimates, while the company also disclosed plans for a new nonvoting Class C stock class tied to Mark Zuckerberg's continued residency in California.
On Meta's quarterly earnings call, Mark Zuckerberg described a future in which billions of users rely on Muse, the personal AI agent Meta released last month, to shop, work and communicate through automated interactions with other people's Muse agents. He said these agents could eventually generate more per-user revenue than Instagram and Facebook, and predicted Muse would become 'highly profitable' within a few years.
Tesla's third-quarter results topped estimates but shares fell after lower average car prices, a battery supply crunch, and Elon Musk's comment that Robotaxi expansion won't accelerate this quarter. Meta initially rallied on a sales beat but turned negative in premarket trading, while separately offering Mark Zuckerberg a new stock class tied to an eight-year California residency commitment. Broader futures declined alongside chip stocks as Asian and European markets also traded lower.
Hundreds of demonstrators gathered outside Meta's São Paulo offices carrying effigies and signs depicting CEO Mark Zuckerberg as the devil, protesting alleged interference in Brazil's presidential run-off. The protest coincided with a Superior Electoral Court order requiring Meta to prove it treated both candidates equitably, after the company restricted over 1,000 accounts linked to Luiz Inácio Lula da Silva while allies of Lula accused it of boosting content favoring Flávio Bolsonaro. Meta has denied wrongdoing, attributing any imbalance to two global service outages.
During Meta's Q3 earnings call, Mark Zuckerberg said more than 10 million engaged users of Meta's Muse AI agent exist, with over 25% using it for shopping at an average purchase of over $200. He said payments partner Plaid reported unprecedented transaction activity, prompting Meta to work with Stripe to raise credit limits to handle demand.
Mark Zuckerberg reportedly considered relocating out of California after a proposed wealth tax targeting billionaires raised concerns within Meta. The levy could have required him to sell a significant portion of his Meta shares, which he worried would threaten his controlling voting stake in the company.
A Meta regulatory filing reveals Mark Zuckerberg agreed to remain a California resident for eight years, even though a ballot measure could impose a one-time 5% tax on billionaires' assets starting January 2026. Zuckerberg had considered moving, listing his Palo Alto home for sale and buying property in Florida, before Meta's special board committee negotiated the residency commitment tied to his ability to sell a new class of non-voting shares.
During Meta's Q3 earnings call, CEO Mark Zuckerberg said more than 10 million people have used Muse since its early September launch in the US and Canada. He said Meta is moving into a scaling phase for the agent and plans to build commerce tools to charge businesses transaction fees, noting shopping purchases through Muse average about $200 each.