Jim Cramer told investors not to sell Meta Platforms (META) over the youth-safety trial in Oakland, California. He argued the legal pressure is temporary and the shares reward patience.
Meta stock trial risk has weighed on the shares all year. They closed Monday at $559.02, up 1.66%, valuing Meta near $1.42 trillion.
Opening arguments in the case, brought by 29 state attorneys general, began on August 18. The states accuse Meta of designing Facebook and Instagram to be habit-forming for minors, then downplaying the danger.
Judge Yvonne Gonzalez Rogers will decide the outcome, because the jury is advisory only. She has already discarded claims tied to infinite scroll and autoplay.
Meta leans on Section 230, the federal law shielding platforms from liability over user posts. The states attack design, not content.
The $1.4 Trillion Figure Is a Ceiling, Not a Demand
No state has asked for $1.4 trillion. The number is a theoretical maximum, alleged violations multiplied by the fines written into state law.
Meta surfaced the calculation in a July 7 filing and asked the court to reject it. The states’ filings remain sealed, and they have never named a figure.
California Attorney General Rob Bonta accused Meta of promoting the number to make the case look unreasonable. Asked for a fair penalty, he pointed to revenue.
“They generated revenue of $200 billion last year, so, you know, maybe that amount would be appropriate. Maybe more. Maybe less,” Rob Bonta, quoted by NPR on Aug. 18.
New Mexico’s separate case ended in $942 million of penalties, a fraction of the number greeting the landmark youth-safety trial.
Cramer made his case on X six days ago, blaming the venue, not the merits.
“Meta trial in the worst possible district for corporate defendants, hence why the stock is being hammered. But the case, while strong enough, might not survive a supreme court review,” Jim Cramer, host of CNBC’s “Mad Money,” in a post.
Bank of America kept its Buy rating and $810 price target, implying roughly 45% upside on 16 times estimated 2027 earnings.
Mizuho is warier, comparing the case to the Big Tobacco fights of the 1990s. Forced product changes would bruise sentiment faster than any fine.
The Inverse Cramer Trade Has a Losing Record
Fading Cramer is a standing market joke, and BeInCrypto covered the latest inverse Cramer episode days ago.
The record does not reward it. Tuttle Capital’s Inverse Cramer Tracker ETF (SJIM) ran from March 2023 to February 2024, losing 15% while the S&P 500 gained 25%.
Quiver Quantitative still tracks the trade, showing a 42.57% win rate and a 17.63% loss over the past year.
Selling Meta because Cramer said hold is therefore a weak thesis. Of 43 analysts tracked by TipRanks, 38 still rate the stock a Buy and none a Sell.
The consensus reads Strong Buy, with an average 12-month target of $752.38. That sits 34.59% above Monday’s close.
Targets run from $580 to $1,000, so even the lowest sits above where Meta trades today.
The stronger bear case sits with Mizuho and the remedies, not with the messenger. Meta’s bill for AI server hardware will test it long before the courtroom does.
The post Jim Cramer Cites Overblown Meta Stock Trial Risk: Is This A Sell Signal? appeared first on BeInCrypto.
Source: https://beincrypto.com/jim-cramer-meta-stock-trial-risk/
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