Key Stats for Meta Stock
- Price change for Meta stock in last 6 months: -5%
- $META Stock Price as of Oct. 23: $643
- 52-Week High: $780
- $META Stock Price Target: $844
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Rhode Island sued Meta Platforms (META) in state court on Thursday.
Attorney General Peter Neronha says Meta tolerated widespread scam ads on Facebook, Instagram and WhatsApp. He says the company profited from them while telling users it was protecting them.
It is the first scam case against Meta brought by a U.S. state, while Santa Clara County in California filed a similar suit in May.
The state wants civil penalties for each alleged violation, wants restitution for consumers, and wants a court order forcing Meta to deal with scam ads instead of profiting from them.
The complaint leans on internal Meta documents reported by Reuters last year, which say Meta shows about 15 billion “higher risk” scam ads a day.
They also say about 10% of its 2024 revenue came from fraudulent e-commerce, dubious health products, and other banned ads.
Rhode Island also alleges that Meta’s AI ad tools helped scammers.
It says some suspected advertisers were charged extra instead of being blocked. One example was an ad promising to reverse Alzheimer’s in 45 days, with more than 2,000 versions in the ad library.
Meta calls the suit “unfounded” and says it will fight it. It says it removed more than 159 million scam ads in the past year and added new anti-fraud tools.
See analysts’ growth forecasts and price targets for Meta stock (It’s free) >>>
What the Market Is Telling Us About Meta Stock
This is one more legal risk for Meta stock. It comes right after other big cases:
- A New Mexico judge ordered Meta to pay $25 billion in a privacy case.
- Meta agreed in August to pay up to $18 billion to settle claims about children’s social media addiction.
On the Q3 call, Meta said it recorded a $9.9 billion legal charge, which cut operating income by 37%. Without the charge, operating income would have risen 11%. Management also said legal and regulatory matters could hurt results.
Capital spending was $34.9 billion in Q3, and free cash flow was negative $2.1 billion, and legal costs add to that pressure on Meta stock.
The size of any penalty is unknown. Investors in Meta stock should watch whether more states follow Rhode Island, and they should also watch how Meta answers in court.
Estimate a company’s fair value instantly (Free with TIKR) >>>
So what is Meta stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what META stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
