Meta Falls Over 6% as $25 Billion Fine Adds $3.75 Billion in Annual Interest

Meta (META) shares dropped more than 6% on Thursday after the company disclosed a $25 billion civil penalty and mounting cost pressures from its artificial intelligence buildout. Third-quarter revenue rose 26% year over year to $64.6 billion, but expenses weighed on results. Meta recorded $9.89 billion in litigation charges tied to a settlement with 52 state attorneys general over teen mental health claims, dragging quarterly operating income down 37% to $12.99 billion and turning free cash flow negative at $2.12 billion. The company raised its full-year capital expenditure outlook to $135 billion to $145 billion. New Mexico Judge Francis J. Mathew, ruling in the Cambridge Analytica privacy case, ordered the $25 billion penalty and applied a 15% statutory interest rate on the unpaid balance, or roughly $3.75 billion a year. Meta said it plans to appeal to the New Mexico Court of Appeals and potentially the U.S. Supreme Court. The Tradr 2X Daily Short Meta ETF (METQ), which seeks double the inverse of Meta's daily return, rose 13.72% intraday to $16.98 on volume above 1 million shares.