Meta agrees deal to keep Mark Zuckerberg in California despite wealth tax proposal

{"text":[[{"start":9.22,"text":"Meta has agreed a deal that lets Mark Zuckerberg sell shares without losing control of the company, in exchange for a commitment that he stays in California even if voters pass a proposed wealth tax."}],[{"start":21.04,"text":"Zuckerberg indicated he had planned to leave California because of a proposed billionaire wealth tax on the state’s ballot next month, according to a corporate filing laying out the justification for the new stock structure."}],[{"start":33.28,"text":"A special committee of Meta’s board ultimately struck a deal with its chief executive, which includes his commitment to stay in the state after negotiations that the filing described as “protracted and, at several points, contentious”."}],[{"start":46.4,"text":"It marks an extraordinary effort by Meta to secure its founder’s ongoing service as CEO and his presence at its California headquarters following the wealth tax proposal, which has drawn criticism from many of the state’s tech billionaires."}],[{"start":59.68,"text":"The tax proposal, which is up for a vote on November 3, would impose a 5 per cent one-time levy on California residents with wealth above $1bn."}],[{"start":69.52,"text":"Zuckerberg controls about 61 per cent of Meta’s votes through super-voting shares and the new stock will let him cash out up to half of his stake over time without losing votes. The 42-year-old can sell a fifth of his new shares once they are issued, which the filing says will allow him to pay the tax if it passes."}],[{"start":87.24,"text":"Zuckerberg is the fifth-richest person in the world with a net worth of $246bn, according to the Bloomberg Billionaires Index. He has committed to stay in California for eight years while he leads the company."}],[{"start":99.76,"text":"The deal emerged from a process that began in late 2025 to reassess Meta’s capital structure and ensure it was able to fund its AI ambitions while “balancing the need to incentivise Mr Zuckerberg”."}],[{"start":111.64,"text":"Meta will create the new class of non-voting shares via a two-for-one stock split to existing shareholders, with the new stock class to begin trading in January."}],[{"start":120.64,"text":"The stock structure would also allow Meta to sell shares in the future to fund its AI investments without diluting Zuckerberg’s control."}],[{"start":127.38,"text":"The Silicon Valley group’s internal forecasts show it will need to raise “hundreds of billions of dollars” over several years, starting as early as this autumn, to fund its bet on AI, according to the filings."}],[{"start":139.2,"text":"“The scale of investment required to compete, sustain growth, expand infrastructure and pursue new strategic initiatives amidst the AI transformation taking place in the industry is significant,” Meta said."}],[{"start":151.34,"text":"The move could face shareholder opposition. Investors in software company Cloudflare have sued in Delaware to block an attempt to implement its own non-voting share class in order to entrench control with its founders."}],[{"start":163.4,"text":"Legal experts view that case as a test of new laws in Delaware that restrict the ability of shareholders to challenge actions of boards of directors."}],[{"start":171.96,"text":"Meta abandoned a similar plan in 2017, days before Zuckerberg was due to testify in a Delaware trial brought by minority shareholders who argued it would create a “misalignment” between his power and his economic stake."}],[{"start":185.9,"text":"The changes came as Meta posted earnings which showed its revenue rose 26 per cent year on year to $64.6bn in the third quarter, as Zuckerberg pours money into his effort to turn the social media group into a leading AI company."}],[{"start":200.96,"text":"Meta’s shares rose as much as 6.5 per cent in after-hours trading before paring those gains."}],[{"start":null,"text":"

"}],[{"start":207.24,"text":"Sales came in above Meta’s guidance of $61bn to $64bn and ahead of analysts’ estimates of $63.3bn. Net income for the period was $9.9bn, after a $9.9bn charge for the settlement it agreed with US states in August over teen mental health harm."}],[{"start":227.16,"text":"A New Mexico judge earlier on Wednesday ordered Meta to pay $25bn related to the Cambridge Analytica affair, after a jury found it violated the state’s consumer protection laws. It marked one of the largest ever verdicts against a company in the US."}],[{"start":242.44,"text":"The results are the latest test of Wall Street’s mood on AI, after SpaceX reported bumper earnings driven by its fast-growing business renting out computing power. That has helped steady a market concerned over AI spending, particularly by neoclouds such as CoreWeave."}],[{"start":258.4,"text":"Meta’s AI bet has begun to win over users. Its Muse personal assistant, which uses autonomous bots to carry out everyday tasks such as ordering groceries and booking travel, has been the top free app on Apple’s App Store and Google Play in the US for most of the time since its September launch."}],[{"start":275.14,"text":"For some users, the assistant is powered by Meta’s latest model Muse Wonder, which it released this month. The tech group claims the model rivals competitors from Anthropic and OpenAI on some tasks."}],[{"start":287.44,"text":"Meta said it devoted $35bn to capital expenditures in the third quarter. The group has forecast up to $145bn of capital spending for the full year."}],[{"start":297.16,"text":"The binge has strained the group’s balance sheet. Meta reported negative $2.1bn of free cash flow in the three-month period, its first quarter of cash burn in at least a decade."}],[{"start":313.16,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792647869_6701.mp3"}