Meta shares fell nearly 5% Friday and more than $20 billion were wiped from Mark Zuckerberg’s net worth as investors feared a “Big Tobacco”-like legal reckoning following two back-to-back courtroom losses for the tech giant.
The Facebook and Instagram owner – which has seen its stock drop nearly 13% this week – shed roughly $119 billion in market cap on Thursday after two verdicts found it liable for failing to protect children, potentially teeing up thousands of similar challenges.
Meta was locked out of the top seven US firms by market cap for the first time since 2023 following the stock drop, according to Dow Jones Market Data.
Zuckerberg, who owns a roughly 13% stake in Meta, saw his net worth plummet to $182.5 billion Friday – down $21 billion from the previous day and making him the biggest loser on the Forbes Real-Time Billionaires list.
A landmark verdict Tuesday in New Mexico found Meta failed to protect kids from sexual predators, ordering it to pay $375 million in civil penalties.
Then a California jury on Wednesday found Meta and Google’s YouTube purposely designed addictive app features meant to hook kids that harmed a now-20-year-old woman, demanding $4.2 million in damages.
Meta has vowed to appeal both cases — a stance that Google shares — but it’s not just the millions in penalties that has sent Meta’s stock nosediving.
Investors are fearful that the trouble is just beginning, as the landmark decisions could encourage a flood of lawsuits similar to the firestorm that bombarded cigarette makers a generation ago.
Social media companies have long been absolved from major legal challenges by blaming potentially harmful content, including sexual and violent posts, on the users who create it.
But the verdicts suggest a “new era in internet litigation,” Jess Miers, an assistant professor of law at the University of Akron, previously told The Post.
Meta and Google face thousands of pending lawsuits across federal and state courts that similarly accuse the social media firms of profiting from intentional design choices that get kids hooked to apps and leave them vulnerable to sexual predators.
Meta, Google, Snap and TikTok will face another high-profile case this June in a California federal court as school districts around the country argue that their addictive apps have disrupted education and weighed on local resources.
Snap and TikTok were also defendants in the California case from this week, but they settled with defendants before the trial started.
In that suit, a 20-year-old woman, known by her first name Kaley, claimed she became dangerously obsessed with Instagram and YouTube at a young age because they were deliberately designed to be addictive to children, with features like infinite scroll and autoplay.
