NEW YORK, Feb 1 (Reuters Breakingviews) – It’s been a big week for Meta Platforms (META.O), opens new tabboss Mark Zuckerberg. On Wednesday, he testified in a congressional committee hearing on the sexual exploitation of children on social-media platforms like Facebook and Instagram. The next day, he announced on a quarterly earnings call that the company would pay its first-ever dividend to shareholders. Excitement around artificial intelligence and a rebound in online advertising might be helping Meta’s stock extend last year’s 100%-plus rise. But tension with lawmakers suggests investors are underestimating bigger risks to come if Meta can’t prove its products are safe.
On Thursday the company announced it made $40.1 billion in revenue, a 25% jump from the same period last year and higher than analysts surveyed by LSEG expected. Zuckerberg touted the company’s progress on AI and the metaverse, areas he has suggested can benefit from technological synergies. The news helped send shares more than 14% higher after market close.
And yet Meta has looming problems, which the Senate hearing highlights. Last May, the U.S. Federal Trade Commission filed its third official complaint over Meta’s privacy policies in an enforcement order that seeks to bar the company from making money from children on its platform. In the hearing Wednesday, South Carolina’s Senator Lindsey Graham told Zuckerberg he had “blood on his hands” as a result of interactions minors have had on his platforms.
