Meta Could Pay Billions To End Teen Addiction Trial – Gary Black Says That Could Boost META Stock

Meta estimates an adverse judgment could reach $1.4 trillion, nearly matching its market value.

• Gary Black said even a multibillion-dollar settlement could lift META by turning uncertain exposure into a one-time cost.
• An advisory jury is expected to deliver its verdict in October, but the judge will determine liability and penalties.
• Instagram chief Adam Mosseri has testified, while Meta CEO Mark Zuckerberg is expected to take the stand.

Shares of Meta Platforms (META) rose 0.2% overnight heading into Wednesday after the company and state attorneys general reportedly discussed settling a blockbuster trial accusing Facebook and Instagram of deliberately addicting children and teenagers.

META stock jumped 2% on Tuesday, with shares up 2% for the month. 

Settlement Certainty Could Lift META Stock 

Future Fund Managing Director Gary Black said even a multibillion-dollar settlement could lift Meta shares by replacing an open-ended legal threat with a defined cost. “Investors would treat it as a one-time non-recurring event,” Black said on X, calling a settlement “positive” for META stock even if it costs several billion dollars.

Meta and attorneys general representing 29 states discussed a potential agreement during the trial’s second week in federal court in Oakland, California, Bloomberg reported, citing people familiar with the talks. The states allege Meta knowingly designed features that encouraged compulsive use among young people while misleading users about safety. They also accuse the company of collecting data from children under 13 in violation of federal privacy law.

Meta denies the allegations and has accused the states of demanding unreasonable platform changes and an “outlandish payout.”

The potential financial exposure is enormous since penalties could be multiplied across millions of young Facebook and Instagram users. By Meta’s calculations, an adverse ruling could cost as much as $1.4 trillion, almost equal to its market value.

Black Sees Escape From $1.4 Trillion Risk

Black’s latest comments mark a shift from his warning earlier this week that the trial would likely weigh on Meta stock until the advisory jury delivers its verdict, expected in October.

He previously compared the legal threat with the tobacco litigation of the 1990s and warned of a “trillion dollar initial judgment” followed by an unfavorable appeals process. The jury will recommend a verdict, but U.S. District Judge Yvonne Gonzalez Rogers will determine liability, penalties and remedies. An appeal would go to the Ninth Circuit Court of Appeals.

Black said Meta could settle for a fraction of the theoretical maximum and see its shares rise, although “other litigation will surely follow.”

Social Media Giants Face Thousands Of Claims

Jurors have heard testimony from Instagram chief Adam Mosseri and Meta employees involved in designing platform features and studying teen behavior. Attorneys also expect to call CEO Mark Zuckerberg.

The trial follows two recent setbacks. Meta and Alphabet’s YouTube lost a California social-media harm case that resulted in a $6 million award, while Meta was ordered to pay more than $940 million in a separate New Mexico case this month. Meta, Alphabet, Snap and TikTok also face more than 3,000 personal-injury claims from U.S. families and individuals, plus 1,300 lawsuits from public-school districts.

How Do Retail Traders Feel About META?

On Stocktwits, retail sentiment for META flipped to ‘bearish’ from ‘bullish’ levels a week ago amid a 62% decline in 24-hour message volumes.

One user said, “$META settlement means more money to be given. This going to tank tomorrow”

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Another user said, “$META the mere mention of the word “settlement” in the media is bullish. Any settlement would be a rocket booster.”

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META stock has declined 24% over the past year. 

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