Meta's settlement has mostly put its legal issues behind them, says Evercore's Mark Mahaney

everything you need. Our best >> BIG NEWS FOR META AND THE BROADER SOCIAL MEDIA COMPLEX TODAY. META AGREEING WITH CALIFORNIA AND QUITE A NUMBER OF OTHER STATE ATTORNEYS GENERAL TO SETTLE ITS FEDERAL CASE OVER SOCIAL MEDIA. CHILD MENTAL HEALTH HARMS. AS PART OF THE SETTLEMENT, META AGREED TO PAY AS MUCH AS $16.7 BILLION. NOW, HAS SEESAWED THROUGHOUT THE DAY TODAY. RIGHT NOW, THE SHARES ARE UP. ABOUT A SEARCH AT EVERCORE ISI. I KNOW YOU WROTE A NOTE ABOUT IT. SHARE WITH OUR VIEWERS SORT OF YOUR BIG TAKEAWAY, MARK, ABOUT THIS SETTLEMENT AND WHAT IT MEANS FOR META MOVING FORWARD. >> OKAY. WELL, I THINK THIS HAS BEEN ONE OF THE TWO MAJOR OVERHANGS ON META STOCK, THE OTHER ONE BEING THE AMOUNT OF CAPEX THEY'RE SPENDING WITH UNCERTAIN RETURNS IN AI SPACE. BUT THIS LEGAL ISSUE HAS BEEN A MAJOR OVERHANG. AND I THINK THEY DID, YOU KNOW, BY DOING THIS DEAL, BY REACHING THIS AGREEMENT WITH 29 STATE AGS, I THINK THEY MOSTLY PUT THIS BEHIND THEM. THE THREE AREAS OF THEIR CASE, THERE'S A SCHOOLS CASE AND THEN THERE'S 1200 SCHOOL DISTRICTS HAVE COME TOGETHER IN A CASE THAT IS GOING TO BE ALSO LOOKED AT BY THE SAME JUDGE EARLY NEXT YEAR. AND THEN THERE'S A SERIES OF INDIVIDUAL LAWSUITS. BUT OF THE THREE KIND OF LEGAL CHALLENGES, THE BIGGEST ONE BY FAR IS THE STATE AG CASE. AND HAVING THIS DECIDED IT AND LARGELY PUT IT IN THE REARVIEW MIRROR, I THINK IT'S A BIG RELIEF FOR FOR THE COMPANY. >> THE OUR COLLEAGUE JULIA BOORSTIN HAS REPORTED THAT THE TEENS USE THE TEENS THAT WOULD BE AFFECTED BY THESE NEW RULES ONLY MAKE UP ABOUT 1% OF FACEBOOK'S BOTTOM LINE. SO IS IT RELEVANT AT ALL? IF TEENS NOW FACE NEW STANDARDS WHERE THEY CAN ONLY BE ON INSTAGRAM AND FACEBOOK? AND HONESTLY, I DIDN'T KNOW THAT TEENS WERE EVEN ON INSTAGRAM AND FACEBOOK ANYWAY. BUT DOES THAT MATTER TO FACEBOOK AT ALL? >> WELL, YEAH, IT DOES MATTER. SO YES, AND THERE'S SOME SHOCKS IN HERE THAT, YOU KNOW, THEY'RE APPARENTLY SOME TEENAGERS WHO ON THE SOCIAL MEDIA SITES PAST MIDNIGHT, WHO KNEW. BUT SO THERE ARE SOME OF THESE SOME OF THESE BLOCKAGES HERE, YOU KNOW, YOU CAN'T BE ON BETWEEN THE HOURS FOR NOW OF 12 AND SIX AND, AND THEN AND THEN AND THEN THERE'S SOME BLOCKAGES OF WHEN MESSAGES CAN BE SENT OUT INTRADAY DURING SCHOOL HOURS. A LOT OF THESE ARE KIND OF HEALTHY COMMON SENSE STEPS THAT META HAS TAKEN. AND NOW PROBABLY OTHER COMPANIES LIKE YOUTUBE, TIKTOK AND PROBABLY SNAP ARE GOING TO HAVE TO TAKE AS WELL THE, YOU KNOW, THIS IS A, THERE IS A IT'S NOT IMMATERIAL AMOUNT OF AD DOLLARS AND TIME SPENT AND ENGAGEMENT AND USERS THAT WOULD COME FROM THIS COHORT, THE UNDER 18 COHORT. SO, YOU KNOW, THERE'S, IT'S PROBABLY A LITTLE BIT LOW SINGLE DIGIT PERCENT IMPACT TO, TO, TO, TO POTENTIALLY TO REVENUE. SO THAT'S WHY THE MARKET'S GIVEN US A LITTLE BIT OF A MIXED REACTION HERE. ONE IS THERE ARE STILL OTHER CASES, YOU KNOW, THE SCHOOLS CASE AND IN INDIVIDUAL LAWSUITS THAT REMAIN UP IN THE AIR, IT'S IT'S UNCERTAIN HOW THOSE ARE GOING TO BE RESOLVED, BUT IT'S HIGH. I THINK IT'S PROBABLE THAT THOSE GET RESOLVED AT A MUCH LOWER AMOUNT THAN THE STATE AGS CASE. AND THEN SECONDLY, THERE'S THIS UNCERTAIN OUTCOME IN TERMS OF THE IMPACT OF THAT, YOU KNOW, SORT OF LOST USAGE TO TO META'S FUNDAMENTALS. >> WELL, YEAH, 17,000,000,000/10 YEARS COULD BE 1.7 BILLION A YEAR. THAT'S, THAT'S, THAT'S LIKE A DAY'S WORTH OF REVENUE FOR META ANYWAY, AT 17 TIMES EARNINGS. YOU FEEL LIKE THE STOCK'S BEEN KIND OF HELD BACK BY THIS. YOU SAID IT WAS AN OVERHANG. SO DOES THIS FREE META TO TRADE AT A SLIGHTLY HIGHER MULTIPLE THEN. AND IF SO HOW HIGH. >> YEAH NO ABSOLUTELY. I THINK IT DOES. THERE'S JUST A LOT OF FEAR IN THE STOCK. KIND OF SIMILAR TO THE FEAR THAT WAS IN GOOGLE STOCK 12 MONTHS AGO. SO YOU KNOW, I THINK AN ASSET LIKE THIS THAT CAN PROBABLY SUSTAIN 20% COMPOUND EARNINGS GROWTH IN THE FUTURE, THAT'S GROWING ITS TOP LINE AT 25 TO 30% WITH 30% OPERATING MARGINS. WHILE DEEP IN INVESTMENT MODE, YOU KNOW, I THINK ALL OF THAT ARGUES FOR A MULTIPLE THAT COULD GO 25 TIMES. AND