Yesterday, shares of Facebook and Instagram owner Meta Platforms (Nasdaq: META) dropped nearly 8% in a single trading session, ending the day at $547.54 per share.
Today, the stock price has continued to fall, down about 2.5% in early-morning trading. At its current price of around $533 per share, it has declined more than 32% since META shares reached an all-time high of over $796 per share last August.
But why has Meta, led by CEO Mark Zuckerberg, seen its stock fortunes reversed so profoundly since last summer? There are three primary factors at play.
The most immediate factor affecting META stock is likely the company’s recent loss this week in a closely watched social media addiction trial.
The trial aimed to determine whether Meta and its social media platforms, especially Instagram, were responsible for the negative effects on one of its users by keeping the user addicted to their platforms since she was a minor.
The jury found that Meta (and, to a lesser extent, codefendant Google) were liable and awarded the plaintiff $3 million in damages, with Meta required to pay 70% and Google the remaining 30%.
Meta said it disagrees with the decision and plans to appeal. But after the California case outcome was announced, the company’s stock plunged nearly 8%.
