Meta Platforms (META) Stock Falls 8% After Losing Two Child Safety Trials

TLDR

• META stock fell nearly 8%, wiping out $119 billion in market cap in a single session
• A California jury found Meta’s platforms were designed to be addictive to children and failed to warn users
• A New Mexico jury ordered Meta to pay $375 million for failing to protect children from online predators
• Mark Zuckerberg admitted overruling an internal recommendation to ban Instagram beauty filters
• Meta now faces thousands of similar lawsuits in the US, UK, and Canada

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Meta Platforms took a brutal hit on Thursday, dropping nearly 8% after losing two separate jury verdicts tied to child safety on its platforms. The selloff erased $119 billion in market cap in a single trading session, pushing META to a 52-week low of $547.75.

Meta Platforms, Inc., META

The drop sent Meta behind Tesla in market cap rankings, making it the tenth-largest US company — a position it hasn’t held since September 2023.

BREAKING: Jury finds Meta, Google liable in landmark social media addition trial, awards $3M in damages

— Fox News (@FoxNews) March 25, 2026

In California, a Los Angeles jury deliberated for nine days before finding that Meta’s Instagram and Google’s YouTube were designed to be addictive to children. Both companies were found to have failed to warn users of the risks. Meta was assigned 70% of the liability, totaling $4.2 million in damages, with Google covering the remaining 30%.

The second blow came from New Mexico, where a separate jury found Meta liable for failing to protect children on its apps from online predators. That jury ordered the company to pay $375 million in damages.

Meta said it “respectfully disagrees” with the California verdict and is evaluating its legal options. No further comment was made on the New Mexico ruling.

Zuckerberg Takes the Stand

Mark Zuckerberg testified in the California case, becoming one of the most high-profile executives to appear in a child safety trial. His testimony included an admission that he overruled an internal recommendation to ban Instagram beauty filters.

He said he was more concerned about free expression, despite expert advice that the filters can encourage body dysmorphia in young users.

That admission is likely to appear in future trials. Plaintiffs in the thousands of pending cases now have a CEO’s own words on record — that Meta was warned internally and chose engagement over user safety.

Analysts and legal experts are calling the verdicts precedent-setting. The cases are being compared to the Big Tobacco lawsuits of the 1990s, where companies were found to have misled the public about the dangers of their products. Those cases led to billions in settlements and widespread public health warnings.

Thousands of Cases Waiting

Two consecutive verdicts using the same legal framework — algorithmic addiction — confirms the approach works in court. Plaintiff attorneys across the country have been building similar cases for years, and thousands of claims are already filed.

Meta faces additional lawsuits not just in the US, but also in Canada and the United Kingdom.

The $4.2 million California damages figure is small by Meta’s standards — the company generates that amount in revenue roughly every four minutes. But the legal exposure from thousands of similar claims is a different calculation entirely.

Wall Street hasn’t abandoned the stock. Meta holds a consensus Strong Buy rating from 45 analysts, with 40 Buy and five Hold recommendations issued in the last three months. The average price target of $865.58 implies about 58% upside from current levels.

META stock closed March 26 at $547.75, down more than 30% from its 52-week high of just under $800.

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