BUZZ-Meta shares drop after the company increases its financing scale to $37.5 billion to expand its artificial intelligence business.

October 27 - ** Meta Platforms (META.O) shares fell 0.3% to $628.86 in pre-market trading after the company raised more funds for artificial intelligence development than expected

** META announced (link) a public offering of 40 million common shares, priced at $625 each, raising $25 billion; it is also issuing $12.5 billion of mandatory convertible preferred shares, with a coupon rate of 6.5% and a maturity of 3 years

** The trigger conversion price for the convertible preferred shares is about $734.21, representing a 17.5% premium over the common share offering price

** On Monday, META shares closed down 1.9% at $630.56. Previously, the company launched a $35 billion (link) stock and preferred stock offering plan, and stated it intends to initiate an “at-the-market” stock sale of up to $60 billion to expand its AI infrastructure

** Chipmakers NVIDIA (NVDA.O), AMD (AMD.O), and Broadcom (AVGO.O) all said they will subscribe for up to $5 billion in shares in this stock offering

** In another statement, NVIDIA (NVDA) said it would invest $3 billion in META’s share offering (link), to deepen collaboration between the two sides on the Facebook parent company's Muse AI assistant and related AI models

** Morgan Stanley and Goldman Sachs are the joint lead underwriters of this public offering

** Last Thursday, META’s share price dropped 7%, as its new share offering plan overshadowed (link) stronger-than-expected third-quarter revenue and a robust fourth-quarter outlook

** As of Monday, META’s share price has fallen about 4.5% year-to-date, underperforming the Nasdaq Index .IXIC, which gained 12.6%

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