“Mad Money” host Jim Cramer labeled Meta Platforms Inc.’s (NASDAQ:META) $17 billion settlement over youth social media addiction claims as a "big win" for the company.
Despite the settlement, Cramer expressed concern that the benefits were not being accurately reflected in Meta’s stock. He criticized the market’s initial reaction to the news, which saw Meta’s stock drop 1.4% before recovering in afternoon trading. The commentator called it “ridiculous,” and stated that shares should have climbed much higher.
Cramer argued that the settlement, which halts a landmark federal trial in California, removes a significant threat to the company. He noted that Meta could have faced up to $200 billion in fines and years of prolonged litigation.
"Somehow the narrative has turned to say that it was not good for Meta. That’s insane," Cramer said during CNBC’s Investing Club’s Morning Meeting.
However, Cramer noted that speculation over Meta potentially raising equity to fund the settlement and its AI investments may have weighed on the stock’s muted reaction. He suggested the company could offset these costs by launching a public cloud business to sell excess computing capacity to other companies.
Senators Slam Meta Over Child Safety
On Wednesday, Meta agreed to pay up to $17 billion to settle claims from 29 states alleging it designed its platforms to be addictive to children, misled users about safety risks and mishandled children’s data. Meta denied wrongdoing.
Under the proposed settlement, Meta would impose teen usage and nighttime limits, strengthen age verification and expand parental controls. Participating states could receive about $12.7 billion, while Meta expects to record roughly $10 billion in legal expenses in Q3 2026. The agreement also includes a $459.3 million settlement over separate Cambridge Analytica-related privacy claims.
The settlement has drawn reactions from several Democratic lawmakers. Sen. Bernie Sanders (I-Vt.) called it a “good step forward” but insisted that “much more needs to be done” to prioritize children’s health over Big Tech’s greed. Other Senators echoed this sentiment, calling for stricter regulation of Big Tech.
Sen. Richard Blumenthal (D-CT) said that it shows Meta "is guilty of harming kids" and bolsters the case for the Kids Online Safety Act. Sen. Dick Durbin (D-Ill.) accused Meta of repeatedly prioritizing profits over child safety and urged bipartisan Big Tech regulation.
META Price Action: On a year-to-date basis, Meta stock is down 12.72%, as per Benzinga Pro. On Wednesday, it closed 1.07% higher at $576.14.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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