Meta shares are falling amid today's selloff. However, the market is paying little attention to the FTC's lawsuit against the company, accusing it of monopolizing the social media segment. Why don't investors consider this a risk?
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Although Meta's stock has been falling in recent days, it is more correlated with the rest of the market than with the fear of the FTC lawsuit itself. This lawsuit could even lead Meta to having to sell Instagram, but the company has defended itself vigorously, and experts say that possibility is very small.
One of the arguments Meta has used to defend itself is innovation within Instagram. In this sense, it points out that a monopoly doesn't innovate because it doesn't need to, while developments within Instagram have been numerous. Furthermore, the company has pointed out that the percentage of R&D spending on sales is higher than that of the rest of the industry, which doesn't fit with a monopoly argument.
On the other hand, other interesting data Meta shows is the distribution of TikTok users in the United States to other apps after the temporary ban. And while it's true that Facebook and Meta benefited the most, others like YouTube also managed to capitalize on the situation.
Ultimately, Meta shareholders can, in principle, be reassured by the demand. However, they should be wary of competition from TikTok and YouTube , as their use of these apps is seen to be increasing compared to Instagram or Facebook, which could erode Meta's margins in the long term.
Meta shares are falling 20% in 2025.
Source: xStation5
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