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Facebook Rises After Lawsuit Dismissal, Hits $1 Trillio...

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Facebook Rises After Lawsuit Dismissal, Hits $1 Trillion Value

By Bloomberg
28 Jun 2021 0

Facebook Inc. shares posted their biggest intraday gain in two months after it won a dismissal of two antitrust cases, pushing its market value above $1 trillion for the first time.

By Jeran Wittenstein and Sarah Frier

Word Count: 437
(Bloomberg) — 

The social-media giant jumped as much as 4.4%, the most since April 29 after a judge granted Facebook’s request to dismiss the complaints filed last year by the U.S. Federal Trade Commission and state attorneys general.

The shares have advanced 29% this year, after the Covid-19 pandemic increased public reliance on Facebook’s apps for staying in touch with friends and businesses, leading to steady growth in users and strong demand for digital advertisements.

Facebook surpassed $1 trillion in market value after a big rally this year

Almost three years after Apple Inc. became the first U.S. company to reach the $1 trillion milestone, there are now four other U.S. technology companies that boast 13-digit valuations including Microsoft Corp., Amazon.com Inc. and Google parent Alphabet Inc. Microsoft reached the $2 trillion level last week.

Read more: Microsoft Rises to Join Apple in Exclusive $2 Trillion Club

Facebook, which Mark Zuckerberg co-founded in 2004 at Harvard University, is the youngest of them all to reach the mark, getting to $1 trillion in just 17 years.

The growth has come at a cost. Zuckerberg has been so focused on adding users and revenue — including by purchasing the competitive apps Instagram in 2012 and WhatsApp in 2014 — that he chose to ignore some of the downsides of running networks that more than 3.45 billion people contribute content to.

Regulators have charged that during its ascent, Facebook lost control over its users’ data and failed to do enough to throttle the flow of potentially harmful or violent information. The U.S. Federal Trade Commission, alongside 46 state attorneys general, sued Facebook in December for anticompetitive behavior, saying the company’s size has resulted in consumer harms including reduced product quality. Zuckerberg has testified in front of U.S. Congress multiple times on Facebook’s various missteps.

Yet from the perspective of an investor, Facebook is thriving. The company faced doubts in its 2012 initial public offering that it would ever be able to make significant money off of users on mobile phones. Ever since Facebook proved that its advertising business would work there, too, it’s consistently found ways to beat expectations for revenue and earnings, and to ensure more people sign on to use its products.

Facebook said in April that revenue in the current quarter will remain steady or accelerate from the first quarter, when sales expanded 48% to $26.2 billion. Of the 58 analysts tracked by Bloomberg that cover Facebook, 49 recommend buying the stock. Six have hold ratings and three are at sell.

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