--- title: "Meta Stock Faces Litigation Overhang: Expert Says It Lacks Tobacco's Pricing Power" type: "News" locale: "en" url: "https://longbridge.com/en/news/296805266.md" description: "Future Fund managing partner Gary Black anticipates Meta Platforms (META) stock will underperform due to a looming $1 trillion federal lawsuit alleging the company misled the public about app safety and addictiveness. Unlike tobacco litigation, Black argues Meta lacks pricing power to offset legal risks, creating a significant overhang until at least October when a verdict is expected. While a settlement could cause a short-term spike, it may trigger further litigation." datetime: "2026-08-24T14:45:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296805266.md) - [en](https://longbridge.com/en/news/296805266.md) - [zh-HK](https://longbridge.com/zh-HK/news/296805266.md) generator: "portal-rs" --- # Meta Stock Faces Litigation Overhang: Expert Says It Lacks Tobacco's Pricing Power Future Fund managing partner **Gary Black** anticipates **Meta Platforms** (NASDAQ:META) stock will take a hit as opening arguments begin in a federal lawsuit against the company. The trial, likely to last six to eight weeks, centers on whether the company misled the public about the safety and addictiveness of apps like Facebook and Instagram. "I expect $META to continue to underperform the S&P 500 near-term as the outcome of a $1 trillion trial in Northern CA overhangs the stock," Black tweeted. Black compares the Meta trial to "tobacco litigation" from 30 years ago. A handful of state attorney generals argue that Meta made their apps addictive for children and teens, improperly collected user data and misled the public about safety protocols. With a jury verdict not expected until October, Black sees overhang on the stock until at least then. Already looking ahead to a potential appeal, Black said an appeal would send the case to the Ninth Circuit Court of Appeals, a “more liberal circuit." The latest Meta legal battle comes after the company lost a social media case in California back in the spring, alongside **Alphabet** (NASDAQ:GOOGL) unit YouTube. In that case, a jury found both companies liable for harming a young user and awarded the user $6 million. That was followed by Meta being ordered to pay more than $940 million for a case in the state of New Mexico earlier this year. **Read Also: Meta Pledged 100% Renewable Energy in 2016: 10 Years Later, It's Ditching the Plan** ## $1.4 Trillion Case Equals Market Cap Meta currently trades with a market capitalization of $1.4 trillion. The full $1.4 trillion in damages equals the company’s current public value. Black says Meta stock trades cheap based on valuation metrics like 15.6x 2026 adjusted earnings per share and +15% long-term earnings per share growth. "The potential for a trillion dollar initial judgment and an unfavorable appellate process before the liberal Ninth Circuit Court of Appeals could overhang the stock just like tobacco litigation impacted tobacco stocks for years," Black tweeted. Black said investors eventually realized tobacco companies could price future litigation into cigarette costs, ending the pressure on those stocks. "Unlike tobacco stocks there is no pricing mechanism that $META can use to offset the risk of litigation." The market expert says Meta could try and settle the latest case for a "few hundred billion dollars." In that scenario, the stock could spike. Still, Black noted that a potential settlement could trigger even more future litigation against Meta. ## Meta Stock Price Action Meta’s stock price is up 0.2% to $551.01 on Monday versus a 52-week trading range of $520.26 to $790.80. It’s down 15.4% year-to-date in 2026. **Read Also: Meta's AI Spending Could Unlock 'Abundant Revenue,' Analyst Says** *Image via Shutterstock* ### Related Stocks - [META.US](https://longbridge.com/en/quote/META.US.md) - [METW.US](https://longbridge.com/en/quote/METW.US.md) - [METU.US](https://longbridge.com/en/quote/METU.US.md) - [METD.US](https://longbridge.com/en/quote/METD.US.md) - [FBL.US](https://longbridge.com/en/quote/FBL.US.md) - [FBY.US](https://longbridge.com/en/quote/FBY.US.md) - [FBYY.US](https://longbridge.com/en/quote/FBYY.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) ## Related News & Research - [Z3 Capital Partners LLC Buys 1,160 Shares of Meta Platforms, Inc. $META](https://longbridge.com/en/news/296881717.md) - [Turtle Creek Wealth Advisors LLC Acquires 2,496 Shares of Meta Platforms, Inc. $META](https://longbridge.com/en/news/296760939.md) - [Meta Reportedly Readies Hatch AI Platform, With Premium Plans Near $200 a Month](https://longbridge.com/en/news/296892144.md) - [Meta CTO Andrew Bosworth disposes of 7,848 Meta shares worth $4.38 million](https://longbridge.com/en/news/296542169.md) - [Meta glasses are a workplace menace](https://longbridge.com/en/news/296488070.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**