Meta Plans Not Only to Invest in AI, But Also to Introduce a New Class of Shares - What's Behind Zuckerberg's Decision?

The agreement reached between Meta co-founder and CEO Mark Zuckerberg and the company has caught investors' attention. The company plans to create a new type of non-voting Class C shares. Following this news, Meta's share price fell 6.5% at the start of Thursday's trading, as investors began assessing the potential impact of the new arrangement.

The main goal of the agreement is to provide Zuckerberg with financial liquidity while allowing him to retain control over the company's management. At the same time, the new shares will give Meta the ability to raise additional capital, which is especially important given the company's large-scale investments in artificial intelligence.

Behind the deal — a potential billion-dollar tax bill

According to a preliminary disclosure document filed by Meta on October 21, Zuckerberg informed the company's special committee of independent directors that he was considering relocating out of California. The reason is the potential introduction of a one-time wealth tax on billionaires in the state.

The initiative, known as Proposition 40, is set to go before California voters in November. According to Meta's estimates, if it is enacted, Zuckerberg could face a tax liability of billions of dollars based on the value of his stake in Meta. Selling shares to cover the tax would risk diminishing his voting power.

For the company, what mattered was not only Zuckerberg's financial position, but also his remaining in California and continuing to lead Meta at a time when the company is ramping up its investments in artificial intelligence.

How will the new share system work?

The new Class C shares will give Zuckerberg the opportunity to increase his personal financial liquidity without immediately losing his existing influence over the company's management. At the same time, Meta will be able to use the new shares to raise capital, compensate employees, and potentially fund acquisitions — without distributing additional voting rights that would weaken Zuckerberg's control.

The agreement also includes a commitment by Zuckerberg to reside in California, or in whatever other jurisdiction houses Meta's headquarters, for the next eight years, subject to the terms and exceptions set out in the agreement.

Nevertheless, the issuance of the new shares could economically dilute existing shareholders' stakes if the company decides to issue additional shares in the future.

As a result, the agreement is not solely about managing Zuckerberg's tax risks. It could also become an important part of Meta's capital-raising strategy, helping the company secure the resources needed for AI development while allowing the founder to retain his existing control over decision-making.