Meta stock falls 10.6% after earnings and $35 billion share sale

Key takeaways

• Meta Platforms (Nasdaq: META) closed at $630.56 on October 26, 2026, down 10.61% over five sessions and just below its 200-day moving average of about $632.45 (data as of 2026-10-26 20:00 UTC).
• Most of the slide came on October 22, when the stock fell 6.98% after third-quarter results showed negative free cash flow of $2.12 billion, according to Meta's SEC filing and CNBC.
• On October 26 Meta launched about $35 billion of stock offerings and outlined plans for up to $60 billion more in non-voting Class C shares, according to its SEC filings and Reuters. The stock fell 1.88% that day.
• The shares are 18.9% below their 52-week closing high of $777.59 (September 24) but still 19.9% above their 52-week closing low.

Meta stock has fallen 10.6% in five trading sessions and closed below its 200-day moving average on October 26, 2026, after third-quarter results showed AI spending pushing free cash flow negative and Meta launched a roughly $35 billion equity raise to fund that spending.

Meta stock: the trend in numbers

The table below uses daily closing prices on the Nasdaq. Moving averages and 52-week levels are calculated from Yahoo Finance daily data. The closes were cross-checked against Stock Analysis historical data.

Here is how the five sessions broke down, according to Stock Analysis historical data:

Volume was heaviest on the two news days, October 22 and October 26. The stock was already weakening before results: it closed down 3.72% on October 16 and fell in eight of the nine sessions from October 14 to October 26.

Why Meta stock is falling

1. Q3 results: AI spending pushed free cash flow negative

Meta reported third-quarter results after the market close on October 21. Revenue rose 26% to $64.60 billion, but costs and expenses rose 68% to $51.61 billion, according to the company's earnings release filed with the SEC. Operating income fell 37% to $12.99 billion and the operating margin halved to 20%.

The release shows capital expenditures, including principal payments on finance leases, of $34.91 billion in the quarter, which left free cash flow at negative $2.12 billion. Meta also took a $9.89 billion legal charge tied to an August 2026 agreement with 52 state attorneys general over teen mental health litigation. It narrowed its 2026 capital spending outlook to $135 billion to $145 billion, from $130 billion to $145 billion, which raised the low end of the range.

The shares fell 6.98% on October 22. CNBC attributed the drop to negative free cash flow and the higher spending floor, and noted that Meta's five-year credit default swaps reached record levels. Reuters said renewed worry about AI spending after Meta's results also helped drive a 2.6% fall in the Nasdaq that day. Bullquill covered the record in Meta's credit default swaps and the Nasdaq selloff separately.

2. A $35 billion equity raise, with up to $60 billion more planned

On October 26 Meta launched public offerings of about $35 billion, according to a free writing prospectus filed with the SEC and a Reuters report. The deal has two parts:

• $22.5 billion of Class A common stock, sold through forward sale agreements with Morgan Stanley and Goldman Sachs. Meta can settle them on dates it chooses up to November 19, 2027, and does not expect initial proceeds from this part. Underwriters have an option on another $3.375 billion.
• About $12.5 billion of mandatory convertible preferred stock, sold as 250 million depositary shares. They are due to convert into common stock around August 15, 2029, and Meta intends to list them on Nasdaq under the symbol "METAM".

The filing says Nvidia, AMD and Broadcom have indicated interest in buying up to $5 billion of the common stock combined. The indications are non-binding. Meta also plans an at-the-market program of up to $60 billion in its new non-voting Class C shares, which the filing says is not expected to begin before the first quarter of 2027. No agreement for that program has been signed. Bullquill explained the Class C share structure when it was announced with results.

New shares dilute existing holders, and the raise marks a turn from buybacks. According to the Q3 release, Meta bought back no stock in the quarter, against $3.33 billion a year earlier. Yahoo Finance reported that the shares swung between a 1% gain and a 4% loss before the open on October 26. They closed 1.88% lower on volume of 32.1 million shares, more than double the previous session.

What is not explained

The 1.59% decline on October 20 and the 3.72% drop on October 16 came before the results. The cause of those moves has not been confirmed by the sources reviewed for this article.

Key levels being watched

The levels below come from published market data, not from forecasts:

• 200-day moving average (about $632.45): the October 26 close was about 0.3% below this long-term trend line, based on Yahoo Finance daily data. A close below the 200-day average is widely read as a sign that a longer-term uptrend has weakened.
• 50-day moving average (about $664.63): the stock has been below this shorter-term average since the October 22 drop.
• Offering price: the public offering price and the preferred dividend rate are set at pricing. The October 26 filings had not yet stated them.
• 52-week range: $525.72 to $777.59 on a closing basis, from Yahoo Finance data.

What we know and what we don't know yet

What we know: Meta's Q3 free cash flow was negative $2.12 billion, its 2026 capex outlook is $135 billion to $145 billion, and it held $82.45 billion of cash, cash equivalents and marketable securities at September 30, according to its earnings release. The company has launched about $35 billion of equity offerings and plans up to $60 billion more from 2027. For the fourth quarter it guided to revenue of $73 billion to $76 billion.

What we don't know yet: the final offering price, the preferred dividend rate, whether Nvidia, AMD and Broadcom will buy shares, when Meta will settle the forward sales, and the size and timing of any Class C sales. Meta has not given a 2027 capex figure. It has said only that it plans to keep investing aggressively, mainly in AI. The cost of the teen mental health settlement could rise, since the release puts possible payments at up to about $18.59 billion.

What it means

The five-session drop shows investors repricing what Meta's AI spending costs. For most of the past decade Meta funded itself from cash flow and bought back stock. It now has a quarter of negative free cash flow, record default-swap spreads (see how credit default swaps work), and a funding plan that could total about $95 billion of new equity across the two programs. That plan is a target, not money already raised.

A close just below the 200-day average puts the stock at the edge of its longer-term trend rather than far below it. Revenue still grew 26% in the quarter. What happens next depends on the offering price, how much stock Meta actually issues, and whether its spending turns into revenue growth fast enough to restore positive free cash flow. Results from other big AI spenders are also due this season, as Bullquill's earnings calendar shows.

This article is for information only and is not investment advice.