Meta Stock Plunges 7% as $9.9 Billion Legal Charge Crushes Record Revenue

Meta Stock Plunges 7% as $9.9 Billion Legal Charge Crushes Record Revenue

Meta shares crashed more than 7% on Thursday, falling to $646.91, after a $9.89 billion legal charge wiped out what would have been a blockbuster quarter. The Facebook parent reported record third-quarter revenue of $64.6 billion, up 26% and ahead of Wall Street forecasts — but earnings per share came in at just $3.83, far below the $5.46 analysts expected.

The charge comes from Meta's settlement with 52 US states over claims that social media harms teenagers' mental health, with total payments possibly reaching $18.59 billion and more trials scheduled in the coming months. Without it, Meta says earnings would have been $7.40 per share. Operating income fell 37% to $12.99 billion, and margins halved from 40% to 20%.

Meta also announced a new class of non-voting Class C shares, effective January 19, 2027, creating a 2-for-1 stock split that keeps Mark Zuckerberg's voting control above 60%. The selloff spread across tech — Intel fell 6%, AMD 7% and Nvidia more than 4% — as investors questioned whether massive AI spending will pay off. Meta guided fourth-quarter revenue of $73–76 billion.

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