Meta gains 5.5% on stock sale plan echoing Alphabet move

Meta Platforms Inc. is considering a large-scale stock sale, mirroring a similar move by Alphabet Inc., as the social media giant seeks to raise capital for strategic investments, people familiar with the matter said.

Meta's shares rose 5.5% on the news, extending gains from earlier in the week when the company announced the global rollout of its Meta Business Agent AI tool and a new Instagram Plus subscription tier. The stock had already gained 4% on Wednesday following the AI announcement and nearly 1% on Thursday after the Instagram Plus launch.

The potential offering follows Alphabet's recent stock sale, which the Google parent used to fund artificial intelligence infrastructure investments and share buybacks. Meta has not disclosed the size or timing of any potential transaction.

The Menlo Park, California-based company has been increasing its investment in generative AI capabilities, data center infrastructure, and its metaverse initiatives. Meta earlier this week launched its AI-powered Business Agent across WhatsApp, Messenger, and Instagram, with more than one million businesses already piloting the tool. The company also introduced Instagram Plus, a paid subscription tier offering enhanced analytics and customization features.

A stock sale would dilute existing shareholders but could provide Meta with additional capital to fund its AI expansion without taking on debt. The company's cash position and the exact terms of any offering have not been disclosed.

For holders, the dilution risk must be weighed against the potential for Meta to deploy the capital into high-return AI investments that could drive long-term earnings growth. Investors will watch for details on the offering size and use of proceeds, which could be disclosed as soon as Meta's next earnings update.

This article is for informational purposes only and does not constitute investment advice.