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Shares in Facebook jumped past $1 trillion after a US judge dismissed federal and state anti-trust complaints against the company on Monday. Had Facebook lost, the social media firm would have had to sell Instagram and WhatsApp.
The two lawsuits were filed by the US Federal Trade Commission and 46 state attorneys general. However, US District Judge James Boasberg rejected the grievances, describing the case as “legally insufficient”.
This isn’t the first time that Facebook has been in the line of fire. Co-founder Mark Zuckerberg has appeared in court multiple times due to Facebook’s missteps.
The incredible growth of the social media platform has come at the cost of its users’ personal information. Regulators have previously spotlighted its indiscretions, stating that Facebook lost control of its users’ data throughout its success and failed to stem the spread of potentially violent and harmful information – the latter was evident during the Trump presidency.
In December, the issue brought forth by the US Federal Trade Commission (FTC) and a coalition of state AGs pertained to Facebook’s size and how it has resulted in consumer harm, including reduced product quality. However, District Judge Boasberg said on Monday that the US Federal Trade Commission had not met the criteria for proving that Facebook has a monopoly on social networking. The complaint can be refiled in 30 days.
Facebook Shares Jump
Facebook shares climbed 4.2% on Monday, increasing their value to $355.64 – the largest increase in two months. The price surge helped push the social media giant’s market value above $1 trillion, making it the fastest firm to reach the milestone.
Facebook’s stock has advanced 30% this year, mainly due to the COVID-19 pandemic. The social media apps belonging to the firm have been heavily relied on to keep in touch with friends and family. Due to this, the amount of app users has grown, along with the demand for digital advertisements.
Tech Firms on the Rise
Apple Inc. was the first publicly traded US company to reach the $1 trillion milestone. Over the next three years, four other US tech companies followed suit, boasting their own 13-digit valuations. These companies include Facebook, Alphabet Inc., Amazon.com, and Microsoft Corp.
Facebook, which was founded in 2004, is the youngest to reach the milestone, having hit the $1 trillion mark in just 17 years.
From the investor’s perspective, Facebook is thriving. Ever since its 2012 IPO, the firm has faced doubts about its ability to generate revenue from mobile users. Yet, time and time again, it has proved the naysayers wrong. Over the years, Facebook has demonstrated its advertising methods were successful on mobile and even managed to continually beat revenue expectations.
Facebook expects its revenue in the current quarter to remain steady after sales grew 48% in the first quarter of this year.
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