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š But none of it shows up on Metaās balance sheet. How? Meta shifted the entire project into a joint venture: š¹ Meta owns 20% š¹ Blue Owl Capital owns 80% š¹ A holding company (Beignet Investor) issued $27.3B in bonds, mostly bought by Pimco š¹ Meta will rent the data center starting in 2029 And hereās the kicker: the lease is structured to qualify as an operating lease, not a finance lease ā letting Meta avoid listing the giant asset and the massive debt. But peel back the layers and things get messy: š„ Meta runs the data center š„ Meta carries the risk of cost overruns š„ Meta guarantees the full value of the bonds if they donāt renew š„ Yet Meta insists it doesnāt ācontrolā the venture enough to count it on the books Even the Wall Street Journal called it āartificial accounting.ā š§© Itās part of a bigger trend: Tech giants want unlimited AI infrastructureā¦ š« ā¦but they donāt want the debt that comes with it. Morgan Stanley estimates the industry could need $800B in off-balance-sheet financing by 2028. Meta may not be borrowing on paper ā but economically, this is debt with extra steps. What do you think: smart financial engineering or a red flag in disguise? Source: Hedgie
Board members recommended shareholders approve the pay plan, which they introduced in September. Top proxy advisors Glass Lewis and ISS recommended voting against it. Results of the vote were announced on Thursday at the companyās annual shareholders meeting in Austin, Texas. The package for Musk consists of 12 tranches of shares to be granted if Tesla hits certain milestones over the next decade. It would also give Musk increased voting power over the company, acceding to demands that heās made publicly since early 2024. The full award would give Musk, who already holds about 13% of the EV maker, more than 423 million additional shares and take his stake to about 25%. Musk would receive the first tranche of stock if Tesla hits a market capitalization of $2 trillion. Teslaās current market cap is $1.54 trillion. The next nine tranches would be awarded if Teslaās value increases by increments of $500 billion, up to $6.5 trillion. Musk would earn the last two tranches if the market cap rises by increments of $1 trillion, meaning it would need to hit $8.5 trillion for Musk to get the full package. Other goals tied to the pay plan include reaching 20 million vehicle deliveries, 10 million active FSD subscriptionsā, 1 million bots delivered andā 1 million robotaxis in commercial operation. To date, Tesla has delivered more than 8 million vehicles, according to its September proxy statement. Source: CNBC
Back in June, Alphabet and Meta were seen as roughly on par, w/only ~$200bn separating them in market value. Just 4 months later, the picture looks completely different ā the gap has exploded to nearly $1.8tn. GOOG is now 2x the market cap of META. (HT Goldman) Source: Holger Zschaepitz @Schuldensuehner