Meta's stock price fell nearly 5% on Friday, wiping more than $20 billion from Mark Zuckerberg's net worth as investors worried the tech giant would face a "Big Tobacco"-like legal liquidation after two consecutive court losses, the New York Post reported.
The parent company of Facebook and Instagram - whose shares have fallen nearly 13% this week - lost about $119 billion in market value on Thursday after two rulings found the company failed to protect children, potentially triggering thousands of similar challenges.
Meta fell out of the top seven U.S. companies by market capitalization for the first time since 2023 as its share price fell, according to Dow Jones Market Data.
Zuckerberg, who owns about 13% of Meta, saw his net worth plummet to $182.5 billion on Friday, down $21 billion from the day before, making him the biggest loser on Forbes' real-time billionaire list.
A landmark ruling in New Mexico on Tuesday found Meta Corporation failed to protect children from sexual predators and ordered it to pay $375 million in civil penalties.
A California jury on Wednesday found that Meta and Google-owned YouTube knowingly designed addictive app features designed to keep children hooked and harmed a now 20-year-old woman, and ordered $4.2 million in damages.
Meta has vowed to appeal both cases — a position shared by Google — but it wasn't just the multimillion-dollar fines that sent Meta's stock tumbling.
Investors worry the trouble is just beginning, as these landmark decisions could trigger a flood of lawsuits similar to those that engulfed tobacco manufacturers a generation ago.
Social media companies have long insulated themselves from major legal challenges by placing the blame for potentially harmful content, including pornographic and violent posts, on the users who created it.
But Jess Mills, an assistant professor at the University of Akron School of Law, previously told The Washington Post that the verdicts signal "a new era of Internet litigation."
Meta and Google face thousands of lawsuits pending in federal and state courts that similarly accuse the social media companies of profiting from apps intentionally designed to keep kids addicted and leave them vulnerable to sexual predators.
Meta, Google, Snap and TikTok will face another high-profile case in federal court in California this June, with school districts across the country arguing that the addictive apps disrupt education and burden local resources.
Meta's stock price continued to fall on Friday.
Snap and TikTok were also defendants in this week's California case, but they reached settlements with the defendants before the trial began.
In that lawsuit, a 20-year-old woman named Kaley claimed that she developed a dangerous obsession with Instagram and YouTube as a child because the sites were intentionally designed to be addictive for children, with features like infinite scrolling and autoplay. (Compiled by Whip Bull Warrior and AI Prius)