Meta announced on Monday that it plans to raise $35bn through new underwritten public offerings, which involves selling the company's stock. In a second move, Meta also plans to launch a $60bn at-the-market offering to sell new common stock to investors at the going market rate in future. That offering involves selling Meta's new class C stock, which it announced it was creating last week.
Meta's not going to struggle to service debts and can lean on equity raises to minimise debt, too.
Fears over the financial stability of neocloud businesses are focused on their high levels of borrowing, which reach approximately $35bn at CoreWeave, and whether the AI market will grow fast enough to service it. The firm's stock has declined in value by more than a third over the past month.
The announcement came after Musk drew an analogy with the survival prospects of the guppy fish—which has a reputation for struggling to thrive in domestic fish tanks—to describe the outlook for"neocloud"providers that lease computing power to AI companies. Musk added that the 200-plus neoclouds are going to see guppy-level death and consolidation amid concerns over the sustainability of their funding.
Cornerstone investors could buy up to $5bn of the stock on offer. Iren and CoreWeave stock later recovered their losses, with Nebius closing more than 3% down.