Meta Platforms used its third-quarter earnings presentation to turn a surprisingly weak operating-income story into something more manageable for investors. The company confirmed that the large lawsuit provision explains much of the discrepancy, while also announcing a stock split that does not shift Mark Zuckerberg's control over the company, according to ForexLive (investinglive.com).

The split that doesn't change the balance of power

Meta will give shareholders one new, non-voting share for every share they already own. Technically, this doubles the number of shares outstanding, and the price per share will fall correspondingly – but the voting rights remain unchanged.

It's a move likely to be welcomed by smaller, private investors, since a lower share price could make the stock more accessible. At the same time, the structure is likely to reignite debate among institutional owners about corporate governance at Meta.

The company already operates with a dual-class share structure in which Class B shares carry ten votes each, compared with one vote for ordinary Class A shares. According to the company's own filings with US authorities, Zuckerberg controls about 13 percent of the economic ownership in Meta, but around 61 percent of the votes – a concentration that makes Meta what is known as a "controlled company" under Nasdaq's rules, with exemptions from certain requirements for independent board structure.

The structure doubles the number of shares without changing the balance of voting power

A déjà vu from 2016

This is not the first time Meta has attempted to introduce a non-voting share class. In 2016, then-Facebook proposed a similar Class C split, intended to let Zuckerberg sell shares to fund his philanthropic projects without losing voting control. The proposal triggered a lawsuit in Delaware Chancery Court from institutional investors, including the Swedish pension fund AP7 and Amalgamated Bank. The legal proceedings revealed that board member Marc Andreessen – who sat on the committee meant to represent independent shareholders – had secret communications with Zuckerberg during the negotiations. Facebook withdrew the proposal in 2017, shortly before Zuckerberg was due to testify under oath.

This historical context means that today's split, even though it is structured differently and not directly comparable, is likely to be scrutinized closely by governance experts and major shareholders.

The numbers behind the quarter

$9.9 billion
Lawsuit provision Q3
$13 billion
Operating income Q3
$175–179 billion
Full-year costs (revised upward)

Meta's operating income in the third quarter came in at around $13 billion, well below analysts' expectations of roughly $20.9 billion. However, the company emphasizes that the entire discrepancy can largely be attributed to the single, large lawsuit provision – and that full-year operating income, adjusted for this item, is expected to exceed the 2025 level.

The company also flagged that upcoming lawsuits in the US related to young users of Meta's platforms represent an ongoing legal risk, which could lead to further costs going forward.

The litigation risk is far from over

Fourth-quarter guidance

Meta reiterated its fourth-quarter revenue guidance of $73–76 billion, in line with consensus of around $73.6 billion. The guidance assumes a currency headwind of about 1 percent year over year – a relatively modest figure, but it means the company cannot rely on a weaker dollar to boost revenue.

The tax rate for the fourth quarter is expected to be between 15 and 17 percent. Capital expenditure guidance (capex) has been narrowed to $135–145 billion, including principal payments on finance leases – a level that still reflects Meta's heavy investment in AI infrastructure.

Reality Labs, the company's venture into VR and metaverse technology, is expected to post a loss of $18–19 billion this year, somewhat less than the year before.

What investors should watch

For the market, two separate stories are now intertwining: an accounting story in which the large underlying operating income looks stronger than the headline numbers suggest, and a governance story in which Meta once again chooses a share structure that secures the founder's control regardless of future share sales or dilution.

With trading in the new shares expected to begin in late January 2027, investors have plenty of time to assess how the split affects both share liquidity and the long-term governance debate surrounding the company.