Market News

Meta Allegedly Tries to Influence Lawmakers; Shares Drop

Shares of social media giant Meta Platforms Inc. (FB) closed down almost 1% on the news that the company had tried to divide lawmakers’ opinion on implementing stricter rules on social media companies. Shares were up 1% at the start of the trading session on December 29, but reversed the gains after the news.

To Prevent Stricter Rules on Social Media Platforms

A Wall Street Journal article titled “Facebook’s Pushback: Stem the Leaks, Spin the Politics, Don’t Say Sorry” swayed the market on the morning of December 29. The article described how the company used its platform to influence the bipartisan decisions on bringing stricter norms for social media platforms.

According to the article, after former whistle-blower Frances Haugen went public in October, Facebook’s Washington team started calling Republican lawmakers and said that she was working with the Democrats. What followed was a series of news articles calling Haugen a Democratic activist.

On the other hand, few calls were made to Democratic lawmakers stating that Republicans were focused on Meta’s decision to ban the expression of support for teenager Kyle Rittenhouse, who was accused of killing two people during the civil unrest in Wisconsin and was later acquitted.

According to the article, META tried to break any alliance between the parties regarding stricter implementation of norms for social media platforms, particularly for Meta.

Wall Street Take

Recently, Jefferies analyst Brent Thill reiterated a Buy rating on the stock with a price target of $420, which implies 22.5% upside potential to current levels.

Thill said, “Oculus’ rise to the top-ranked app in the US App Store gives us conviction that virtual reality (VR) usage is more mainstream than we’d previously thought. Our team bought 3 Quest 2s and found the games and experiences highly engaging. While FB’s VR investments are likely EPS dilutive in the near term (est. $10B drag on op. profit in ’21), we view them as a critical on-ramp for attracting the younger demo.”

Overall, the stock commands a Strong Buy consensus rating based on 29 Buys and 6 Holds. The average Meta Platforms price target of $406.31 implies 18.5% upside potential to current levels. Shares have gained 26.1% over the past year.

Stock Investors

TipRanks’ Stock Investors tool shows that retail investors currently have a very positive stance on one of the FAANG stocks, Meta Platforms. According to the tool, 2.1% of portfolios tracked by TipRanks increased their exposure to FB stocks over the past 30 days.

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