Meta Platforms (META) has pulled out of a sponsorship deal for the 2026 commemoration of the U.S. 250th anniversary project and canceled the remaining $10 million of the agreement with the organizers.
According to the Wall Street Journal, the project was affected by strife among the commissioners appointed by Congress and discrimination lawsuits filed by female executives. Meta was the only corporate sponsor of the project.
Meta has already paid $2 million to be the exclusive social connectivity partner but will not pay the remaining amount.
In another major development, the Department of Justice (DOJ) has settled a housing discrimination lawsuit with Meta. The DOJ had accused Meta of violating the Fair Housing Act and that the company’s housing advertising discriminated against users based on a range of factors, including color, religion, sex, and race.
Meta has now agreed to change its advertising delivery and will bring in a new system in the next 1.5 years to mitigate the racial and other disparities resulting from its personalization algorithms. Most importantly, this was the DOJ’s first case to take on algorithmic discrimination.
Although Meta has been facing regulatory headwinds for a while now, the company remains focused on the metaverse, and CEO Mark Zuckerburg expects it to be as big as Meta’s present media units. According to CNBC, he expects over a billion people to spend time in the metaverse and is positioning the company to be at the forefront of this innovative AI wave.
Analyst’s Take
Meanwhile, the Street has a Strong Buy Consensus rating on Meta and sees 76.36% upside potential in the stock based on an average price target of $274.85.
Hedge Funds
Concurrently, hedge funds have increased holdings in the stock by 9.1 million shares in the last quarter, indicating a very positive hedge fund confidence signal in Meta. Notably, Prem Watsa’s Fairfax Financial Holdings (FRFHF) has upped its stake in Meta by 400%.
Closing Note
The settlement of the DOJ lawsuit is historic, as it was the first case against algorithmic discrimination. Additionally, Meta’s singular focus on the Metaverse should drive results in the long run for the company.
