3 ms·

Given that Meta’s stock hasn’t dropped, I’m willing to bet either this isn’t news or it poses no real threat to Meta.

metacritic12 5y ago
Or it's possible the split up company doesn't have significantly lower market value than the monopoly company. Imagine a 25% non-monopoly discount and a 25% chance of being split up and that would only be a 6% drop in value.
- maaanu 5y ago
  That only holds true if the market is purely rational which it is not.
  - BbzzbB 5y ago
    Conglomerates tend to be valued less than the sum-of-the-parts, getting control of conglomerates to spin off their businesses is a common active investing tactic. Breaking FB up is likely to unlock value for shareholders rather than hinder it. At least, short term as far as stock valuations go, a "markets are irrational" stance works in favor of this theory as it (the market) gets to speculate on every sub-business individually. Long term there are advantages to being under a single banner, like subsidizing Oculus growth and R&D through profits from the social medias to capture long term market share (like Amazon can subsidies retail with AWS, Alphabet can subsidies its "Other bets" with Search, etc).
- lovecg 5y ago
  I remember reading that in many cases total market cap goes up post-split.
badRNG 5y ago
It isn't much news (disclaimer: IANAL.) Facebook had submitted a motion to dismiss the lawsuit. A motion to dismiss means they assume that every fact alleged by the FTC is true. You perform a motion to dismiss to say "even if everything they said is true, it still isn't even possible for them to win the lawsuit." The judge said, essentially, that if every fact the FTC alleges is true, then it is at least feasible that the FTC could have a successful lawsuit. There are two key things that this go ahead does NOT do: 1. It does not look at whether even a single alleged fact by the FTC is true 2. It does not mean that the FTC suit would be successful even if every fact is successfully proven
- vineyardmike 5y ago
  This is actually not really true? > A motion to dismiss means they assume that every fact alleged by the FTC is true. FB actually claims that every fact is false. The motion more means, that its so evident that the claim is false that it shouldn't be litigated. (eg. you wouldn't carry a trial claiming fb was a monopoly book-seller). > The judge said, essentially, that if every fact the FTC alleges is true, then it is at least feasible that the FTC could have a successful lawsuit. This is true. The judge said there was doubt over the truth of the FTC allegations, but those truths could be decided in court. Specifically, questions over market definition (key to proving monopoly) were unproven and had significant doubts.The courts rejected the suit once already over these definitions, so this is a followup that adds details... but not much details.
  - dragonwriter 5y ago
    > FB actually claims that every fact is false They may, but the standard for deciding a motion to dismiss is to assume every fact actually in dispute is resolved against the moving party, if they would still prevail in that case, then their motion is granted. (Note that there is a distinction that is easy to get tripped up on between “facts” and “conclusions of law asserted as if they were facts”, and it is not unheard of for a a motion to dismiss to center around the other party providing conclusions of law without supporting facts rather than actual facts.)
hardtke 5y ago
The deal that really reeked of buying the competition was WhatsApp, but since WhatsApp has very small market share in the US compared to iMessage I don't see how that can be an antitrust violation in the US. In the rest of the world it could be.

Or it's possible the split up company doesn't have significantly lower market value than the monopoly company. Imagine a 25% non-monopoly discount and a 25% chance of being split up and that would only be a 6% drop in value.

maaanu 5y ago
That only holds true if the market is purely rational which it is not.
- BbzzbB 5y ago
  Conglomerates tend to be valued less than the sum-of-the-parts, getting control of conglomerates to spin off their businesses is a common active investing tactic. Breaking FB up is likely to unlock value for shareholders rather than hinder it. At least, short term as far as stock valuations go, a "markets are irrational" stance works in favor of this theory as it (the market) gets to speculate on every sub-business individually. Long term there are advantages to being under a single banner, like subsidizing Oculus growth and R&D through profits from the social medias to capture long term market share (like Amazon can subsidies retail with AWS, Alphabet can subsidies its "Other bets" with Search, etc).
lovecg 5y ago
I remember reading that in many cases total market cap goes up post-split.

badRNG 5y ago

It isn't much news (disclaimer: IANAL.) Facebook had submitted a motion to dismiss the lawsuit. A motion to dismiss means they assume that every fact alleged by the FTC is true. You perform a motion to dismiss to say "even if everything they said is true, it still isn't even possible for them to win the lawsuit." The judge said, essentially, that if every fact the FTC alleges is true, then it is at least feasible that the FTC could have a successful lawsuit. There are two key things that this go ahead does NOT do: 1. It does not look at whether even a single alleged fact by the FTC is true 2. It does not mean that the FTC suit would be successful even if every fact is successfully proven

vineyardmike 5y ago
This is actually not really true? > A motion to dismiss means they assume that every fact alleged by the FTC is true. FB actually claims that every fact is false. The motion more means, that its so evident that the claim is false that it shouldn't be litigated. (eg. you wouldn't carry a trial claiming fb was a monopoly book-seller). > The judge said, essentially, that if every fact the FTC alleges is true, then it is at least feasible that the FTC could have a successful lawsuit. This is true. The judge said there was doubt over the truth of the FTC allegations, but those truths could be decided in court. Specifically, questions over market definition (key to proving monopoly) were unproven and had significant doubts.The courts rejected the suit once already over these definitions, so this is a followup that adds details... but not much details.
- dragonwriter 5y ago
  > FB actually claims that every fact is false They may, but the standard for deciding a motion to dismiss is to assume every fact actually in dispute is resolved against the moving party, if they would still prevail in that case, then their motion is granted. (Note that there is a distinction that is easy to get tripped up on between “facts” and “conclusions of law asserted as if they were facts”, and it is not unheard of for a a motion to dismiss to center around the other party providing conclusions of law without supporting facts rather than actual facts.)

hardtke 5y ago

The deal that really reeked of buying the competition was WhatsApp, but since WhatsApp has very small market share in the US compared to iMessage I don't see how that can be an antitrust violation in the US. In the rest of the world it could be.