🚨 HUGE: Meta just walked into a courtroom facing a fine that could wipe out its entire market cap, and Wall Street is already pricing in the fear.
Shares dropped 3.54% Monday to $568.97, then kept sliding into Tuesday's open as opening arguments began in Oakland federal court.
The number driving the selloff: $1.4 trillion. That's the maximum penalty Meta itself disclosed as a worst-case outcome, a figure roughly equal to the company's entire $1.45 trillion market cap.
Twenty-nine states are suing Meta for allegedly violating child privacy law by harvesting minors' data without consent. Four of those states, California, Colorado, Kentucky, and New Jersey, are going further, accusing Meta of deliberately engineering Facebook and Instagram to be addictive to teens, then misrepresenting the platforms as safe. Those four states alone are seeking close to $200 billion in damages.
This isn't a quick fight. The trial is expected to run six to seven weeks, with a verdict possible in early October. Both Mark Zuckerberg and Instagram chief Adam Mosseri are expected to testify.
Legal bills are already piling up separately from any verdict, Meta spent $2.4 billion on legal costs in a single quarter, a real drag showing up in earnings before the trial even started.
The remedies being sought go beyond money. States want age verification mandates, the removal of infinite scroll, and forced changes to the algorithms and AI models that run Meta's platforms.
Legal analysts are already drawing comparisons to the 1990s tobacco litigation, cases that didn't just cost billions, they permanently changed how an entire industry operated.
Meta denies all the allegations and says it will appeal regardless of the outcome.
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