Key Stats for Meta Stock
- Price change for Meta stock in the last 6 months: 26%
- $META Stock Price as of Oct. 5: $745
- 52-Week High: $780
- $META Stock Price Target: $795
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What Happened?
Last week, New Mexico asked a judge to order Meta Platforms (META) to pay $35 billion to $40 billion in penalties.
A jury found on September 25 that Meta misled consumers about the privacy of their data on Facebook.
The case grew out of the Cambridge Analytica scandal. The British firm collected data from as many as 87 million Facebook users through a third-party app without their consent.
New Mexico filed the lawsuit in 2021. It says Meta lied about who could access user data and how it handles hate speech and misinformation.
At the hearing, state attorney Randi McGinn said the court should “speak to Meta in the only language it understands, which is money.”
She said the amount equals about 20% of the possible penalties under state law.
Meta pushed back. Its lawyer called the request an “astronomical penalty.”
Meta wants the penalties capped at $3.45 billion. It says it does not sell user data and that the state did not prove any consumer was actually misled.
Judge Francis Mathew told both sides that parties “roll the dice” at trial. He expects to rule later this month.
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What the Market Is Telling Us About Meta Stock
This case adds a new risk for Meta stock. The state’s own lawyer said the penalty should affect the company’s stock price. The gap between the two sides is huge, so the judge’s ruling matters.
Meta can afford a large bill. It ended the Q2 with $90.3 billion in cash and marketable securities.
Revenue rose 28% to $60.8 billion. But free cash flow was only $784 million, since the company spent $31.1 billion on capital expenditures.
Legal costs are already rising. Meta booked a $2.4 billion charge for legal proceedings in Q2.
That helped push operating income down 8% from last year. Management also warned that youth-related trials this year could lead to a material loss.
For those watching Meta stock, the risk was already on the table.
Meta stock may also react to how large the final penalty is, and to what Meta does next if the amount is high. For now, investors are waiting on the judge’s decision.
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So what is Meta stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!