Meta has agreed a deal that lets Mark Zuckerberg sell shares without losing control, in exchange for a commitment that he stays in California. California votes on a proposed billionaire wealth tax on November 3. Meta also reported third-quarter revenue of $64.6 billion.
Meta has agreed a deal that lets Zuckerberg sell shares without losing control of the company, in exchange for a commitment that he stays in California even if the state passes a proposed wealth tax. Zuckerberg indicated he had planned to leave California because of the proposed wealth tax, according to a corporate filing.
Zuckerberg weighed leaving over Proposition 40
Zuckerberg expressed that he is contemplating relocating from California if a proposed 5% tax on billionaires is implemented, as reported by Bloomberg. California's Proposition 40 suggests a one-time tax on individuals with net worths exceeding $1 billion who were residents on January 1, 2026.
The proposal is up for a vote on November 3. Zuckerberg has committed to stay in California for eight years while he leads the company.
Non-voting shares let Zuckerberg sell without diluting control
Meta will create the new class of non-voting shares via a two-for-one stock split to existing shareholders, with the new class to begin trading in January. Under the deal, Zuckerberg can immediately sell a fifth of the new shares he receives, which the filing frames as allowing him to pay the tax if it passes.
The structure also lets Meta sell shares in the future to fund its AI investments. The company's internal forecasts show it will need to raise "hundreds of billions of dollars" over several years, according to the filings.
Revenue rises 26% as cash flow turns negative
The changes came as Meta reported revenue up 26% year on year to $64.6 billion in the third quarter. Meta's shares rose as much as 6.5% in after-hours trading.
However, spending strained the balance sheet. Meta reported negative $2.1 billion of free cash flow in the quarter, its first quarter of cash burn in at least a decade.
Sources: Crypto Briefing, Financial Times
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