Facebook reserves $ 3 billion to cover anticipated costs, including an anticipated fine, related to an ongoing investigation with the Federal Trade Commission on its privacy practices, announced today the company . Spending could reach $ 5 billion, said Facebook.
The figure may seem massive, but Wall Street is dizzying. On Wednesday afternoon, Facebook's share price rose by more than 8%, indicating that investors believe that the estimated fine is a slap that could have been much worse.
"A fine of a few billion dollars would ignore Facebook", David Cicilline, Chair of the Subcommittee on Commercial, Administrative and Antitrust Law, told BuzzFeed News earlier this year. "The fines must be so high that they change the behavior of the company and it is no longer just the cost of doing business."
In its report on the results, Facebook said it set aside $ 3 billion in anticipation of the settlement. And while this weighed on its net profits, the company's revenue in the first three months of 2019 still grew 26% over last year, reaching $ 15 billion, and its global user base remains important.
After announcing the expected settlement, Facebook's market capitalization grew to about $ 40 billion in just over an hour of trading after regular office hours.
BuzzFeed News solicited comments from Facebook.