Meta Jumbo Bond Sale Seeks to Raise at Least $25 Billion

Watch Meta Jumbo Bond Sale Seeks to Raise at Least $25 Billion - Bloomberg on Dailymotion

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00:00What's your sense of how much more some of these tech giants are going to have to tap the debt

00:03markets to fuel some of their AI spend? Yeah, it's data that I've been tracking

00:07really closely. Meta's sixth part is really interesting. The duration ranges five years

00:12to 40 years, which like at one time, and Lisa, you know this better than me, we'd be like 40

00:17years. What? That's insane. But it's not unprecedented, even in this portion of the year.

00:23If you remember, Oracle did a 40-year note that was 1.37% over treasuries. This Meta

00:29one, according to a Bloomberg source, is 1.4%. But it speaks to the imminent capital need and the

00:36longer-term capital need that Meta has. And, you know, the story from overnight is that capital

00:41expenditures in the next fiscal year, 2026, will be notably larger than they are this year

00:46at a top of $72 billion. That's the stakes we're talking about.

00:50Ed, do you have a sense of what Meta is spending on, given the fact that they don't have the cloud

00:54that, say, the Microsofts or the Alphabets have?

00:58Yeah, this is what spooked the market, right? You know, Meta is not a hyperscaler.

01:04And the way to look at it is that its aggressive investments in capacity are in part to meet

01:10internal demand, which is also a part of the evidence that the CFO, Susan Lee, is trying

01:15to put forward that they're seeing returns straight away. When you bring a new data center

01:19online or new capacity online, Meta often has to look within its own teams and say,

01:24what's the biggest priority here? That is difficult for analysts to model how it immediately

01:30translates to top-line growth, right? And so that's the brinkmanship going on here.

01:35Meta's sort of willingness to front-load investment, as Hal Zuckerberg put it, and the visibility

01:40of the market to see revenue growth that would justify it, near-term or longer-term.