Meta Stock Rises as Investors Brush Off Record NM Penalty

Wall Street barely blinked. Shares of Meta Platforms climbed 2% on Wednesday, the same day a New Mexico judge formalized what state officials called one of the largest corporate verdicts in American history. The market’s indifference underscores a financial reality for investors: even historic penalties tied to decade-old data privacy scandals are manageable for a company generating tens of billions of dollars in quarterly profit.

The disconnect between courtroom rhetoric and stock performance highlights how the financial mechanics of Big Tech litigation have evolved. While New Mexico Attorney General Raúl Torrez framed the penalty as an “unambiguous message” to Silicon Valley during a news conference, traders appeared focused on the Menlo Park, California-based company’s scheduled quarterly earnings report later that afternoon rather than the legal setback.

The underlying facts stem from the Cambridge Analytica scandal, where a political consulting firm harvested Facebook user data via a third-party personality quiz affecting roughly 87 million profiles to generate targeted political ads for the 2016 election. Clients of the now-defunct firm included the 2016 campaign for President Donald Trump.

Jurors in September found Meta liable for over 43 million violations of New Mexico consumer protection laws. Judge Francis Mathew handed down the final amount this week. State prosecutors had originally sought $35 billion to $40 billion, arguing only a sum affecting the stock price would force change. Meta’s lawyers countered with a maximum of $3.4 billion, warning anything higher would be “shocking to the conscience” and unconstitutional, according to Meta attorney Matt Nicholson.

New Mexico’s decision to litigate rather than settle was a calculated outlier. Forty-eight other states signed an $18 billion settlement with Facebook in August, which included an agreement releasing Meta from future liability related to the Cambridge Analytica breach. Florida also declined to sign but did not pursue a trial. By going it alone, New Mexico secured a jury finding of 2.1 million violations on certain counts—based on the premise that public statements deceived the entire state population, not just users—pushing the total past 43 million.

Under the New Mexico Constitution, fines for consumer protection violations flow directly into state education spending. “We may have paid for the construction of schools for the next 100 years,” Torrez said. But he acknowledged the funds will remain inaccessible if Meta appeals, as expected. Interest on the penalty will accrue during any appeal process.

An appeal presents a specific legal vulnerability for the state’s case. Meta has argued that counting violations based on how many individuals may have heard or seen misleading statements is unprecedented. “The jury didn’t make findings that any New Mexican heard or saw these statements, or was harmed by them,” Nicholson said during an Oct. 1 hearing. Defense attorneys maintained the state failed to prove actual harm and that its evidence was outdated despite five years to gather material.

The defense also secured a notable victory at trial. Jurors found the state failed to prove Facebook made false claims about removing harmful content, including misinformation about the COVID-19 pandemic. State attorney Randi McGinn argued during closing arguments that Facebook profited off harmful content, a claim CEO Mark Zuckerberg denied in a video deposition, stating the company must balance freedom of speech with content moderation. Meta’s lawyers noted the platform now removes 99% of content violating its standards.

Representatives for Meta did not immediately respond to a message seeking comment about the finalized penalty amount. Beyond the financial damages, New Mexico is seeking an injunction to stop similar practices on the platform.

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Schuettler reported from Phoenix. Schuettler is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.