Meta Stock Falls Through the Trial's Opening Days as Wall Street Bets on the Verdict, Not the Sticker Price

Since opening arguments began Tuesday, August 18, in Oakland federal court, Meta stock has swung hard: down 4.45% Tuesday to $543.67, and a further slide Wednesday. As of early Thursday morning, before the U.S. market open, premarket indications pointed to the stock ticking up about 1% alongside broader market strength, according to Yahoo Finance and inkl — though that figure reflects pre-market activity, not a confirmed opening or intraday move. The stock is now down roughly 16% over the past month and nearly 30% over the past year.

The trial itself isn't new. What's new is the market finally putting a price on it, and that price keeps moving as lawyers, analysts, and TV personalities argue over what number actually matters.

Where $1.4 trillion really came from

Meta produced the $1.4 trillion figure itself. According to Yahoo Finance, the company calculated that number in July while responding to the states' brief on how penalties should be calculated under statutes that allow fines up to $20,000 per violation, multiplied across millions of young users. Meta calls that math "unmoored" and "outlandish."

California's own lawyer, Megan O'Neill, put the more likely number at around $193 billion to $200 billion during a court hearing last week, according to Insurance Journal, while suggesting Meta inflated the ceiling for shock value. Meta disagrees with that characterization, but the gap between $1.4 trillion and $200 billion is the states' own admission that the headline number is a legal ceiling, not a prediction.

For comparison, the 1998 tobacco settlement with state attorneys general totaled $206 billion. Even the states' lower figure would rank among the largest litigation payouts in American history, per Insurance Journal.

The stronger case against Meta

The states' argument, backed by 29 attorneys general, is that Meta built infinite scroll, autoplay, and beauty filters specifically to trigger compulsive use in minors, then misled the public about the harm, according to Yahoo Finance. Former Meta engineer Arturo Bejar testified that child safety concerns were disregarded during product development, per TradingView.

A Los Angeles jury already awarded $6 million in March to a young woman who blamed over a decade of Instagram and YouTube use for her anxiety, depression, and body dysmorphia, according to Insurance Journal. A New Mexico jury found Meta liable in March under that state's unfair practices law, resulting in a $375 million judgment and a later $567 million abatement-fund order, according to TrendSpider. Meta says it disagrees and plans to appeal.

Vanderbilt law professor Rebecca Haw Allensworth told CNBC she believes Meta is more likely than not to lose the California trial, citing evidence of engagement-maximizing design paired with weak age verification, according to inkl.

The fair case for Meta

Meta's defense merits full weight. The company says the states "offer no proof anyone in their states was misled, claimed benign features like having an Instagram account somehow harmed their residents and attempt to penalize Meta for industry wide challenges like age verification," per 247wallst.

No major consumer platform has a scalable age-verification system that satisfies privacy law, parents, and regulators all at once. If Meta loses on that theory, every competitor—TikTok, Snap, YouTube—inherits the same legal exposure. Meta also points to stronger teen privacy defaults and Instagram's one-hour usage reminder as evidence it already responded to the criticism, according to Yahoo Finance.

Meta further leans on Section 230 and First Amendment arguments, which Allensworth told CNBC could matter more on appeal than at trial, potentially reaching the Supreme Court, according to inkl.

What actually moves the stock

The dollar figure isn't the real threat. Deepwater Asset Management's Gene Munster estimates Meta's realistic fine exposure over five years at around $25 billion, which he believes the company can absorb once its heavy AI capital spending eases and annual cash flow reaches an estimated $40 billion to $60 billion, according to inkl.

The bigger risk is injunctive. States want Meta to delete data collected from users under 13, scrap AI models trained on that data, and strip recommendation systems, autoplay, and infinite scroll from teen-facing products, according to TrendSpider and Yahoo Finance. That reaches directly into the ad engine funding Meta's AI infrastructure buildout, including its compute deal with Anthropic.

The Verge's Nilay Patel compared the case to Microsoft's antitrust fight, telling CNBC it could force Meta to defend its core business while navigating its AI transition, per inkl. CNBC's Jim Cramer, by contrast, blamed the Oakland venue rather than the legal merits for Tuesday's selloff, according to Yahoo Finance.

Options flow on August 17 turned notably bearish ahead of the trial, with heavy put buying in the $530–$580 range, according to TrendSpider. Insider selling from COO Javier Olivan and director Marc Andreessen appears to follow pre-scheduled disposal plans rather than signal fresh concern, per the same report.

Judge Yvonne Gonzalez Rogers will decide the case alongside a nonbinding advisory jury verdict, with the trial expected to run six to seven weeks, according to inkl and 247wallst. Zuckerberg and Instagram chief Adam Mosseri are both expected to testify. Neither has taken the stand as of this writing, and no verdict, ruling, or settlement has been announced.