The U.S. Supreme Court has declined to hear Meta Platforms’ (META) appeal to avoid a multi-billion dollar class action lawsuit from advertisers who claim that the social media company inflated the potential audience size for ads on Facebook and Instagram. The class action accuses Meta of overcharging by exaggerating the number of people their ads could potentially reach.
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In March 2024, the 9th U.S. Circuit Court of Appeals ruled 2-1 against Meta, which allowed advertisers to pursue damages as a group, alleging that Meta’s misrepresentation of audience size was part of a “common course of conduct.” Plaintiffs, including DZ Reserve and Cain Maxwell, argued that Meta overestimated potential ad viewers by as much as 400% by basing its figures on social media accounts rather than actual users.
Unsurprisingly, given that Ads remain Meta’s primary revenue source, contributing $116.1 billion in revenue in the first nine months of 2024, Meta argued that the class action ignored the fact that some advertisers may not have found the audience data misleading or relevant. The company also claimed that the 9th Circuit gave too much deference to lower courts certifying class actions. It will be interesting to see how this lawsuit will play out.
Zuckerberg Describes the Corporate World as “Culturally Neutered”
In a separate development, Meta Platforms CEO Mark Zuckerberg criticized the Biden administration, corporate culture, and Apple (AAPL) in an interview with Joe Rogan. He described the corporate world as “culturally neutered” and defended “masculine energy” in the workplace.
Zuckerberg also claimed Biden officials pressured Meta during the pandemic over COVID-related posts and expressed frustration with Apple by arguing that the company hasn’t created anything groundbreaking since the iPhone. The interview followed Meta’s announcement that it will be ending its fact-checking program and scaling back its diversity initiatives.
Is META Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 39 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 66% rally in its share price over the past year, the average META price target of $688.34 per share implies 13.5% upside potential.
