Meta Stock Decline Drives Zuckerberg to Sixth-Richest as Regulatory Concerns Mount

This analysis is based on the Forbes report [1] published on November 6, 2025, which reported Mark Zuckerberg’s decline to sixth-richest person globally, supplemented by a Reuters investigation [2] revealing concerning details about Meta’s revenue sources.

Meta’s stock experienced significant volatility on November 6, 2025, dropping 2.3% to approximately $620.75 [0][1]. This decline contributed to a broader 17.5% weekly drop and a 17.47% decline over the past 30 days, with shares falling from $750.00 to $618.94 [0]. The trading volume surged to 23.46 million shares, substantially above the average of 13.99 million shares, indicating heightened investor concern [0].

The stock decline directly impacted Zuckerberg’s wealth ranking, causing him to fall from third to sixth place among the world’s wealthiest individuals [1]. His net worth decreased by $4.6 billion (2.1%), now ranking behind Jeff Bezos ($257 billion), Larry Page ($235 billion), and Sergey Brin ($217.9 billion) [1].

The Reuters investigation [2] revealed alarming details about Meta’s revenue composition, showing that the company internally projected 10% of its 2024 revenue (~$16 billion) would come from advertisements for scams and banned goods. Additionally, Meta estimated showing users 15 billion “higher risk” scam advertisements daily, generating approximately $7 billion in annualized revenue from this category [2].

Critical compliance concerns emerged from the investigation:

• Meta only bans advertisers with 95% certainty of fraud
• Suspected fraudsters are charged higher ad rates rather than being immediately banned
• Multiple ongoing regulatory investigations including SEC scrutiny for running financial scam ads

Despite the company-specific concerns, Meta’s decline occurred during broader tech sector weakness, with NASDAQ Composite down 1.74% and S&P 500 down 0.99% on November 6 [0]. However, Meta’s decline outpaced broader market weakness, indicating significant company-specific issues.

Paradoxically, fundamental metrics remain strong with Meta trading at a P/E ratio of 27.41x, market capitalization of $1.56 trillion, net profit margin of 30.89%, and operating margin of 43.23% [0]. Analyst sentiment remains bullish with 80% maintaining BUY ratings and a consensus price target of $840.00, representing 35.7% upside potential [0].

The investigation reveals fundamental tensions between Meta’s growth objectives and ethical business practices. The company’s admission of profiting from fraudulent content while implementing minimal enforcement measures raises serious questions about long-term business model sustainability and corporate governance standards [2].

The discrepancy between strong fundamentals and declining stock price suggests the market is pricing in significant regulatory risk. The ongoing SEC investigation and potential for substantial fines could materially impact future earnings, particularly if the company is forced to eliminate the $16 billion in scam ad revenue [2].

The stark contrast between analyst price targets ($840.00) and current trading levels (~$620.75) indicates either significant market overreaction or analyst underestimation of regulatory risks [0]. This divergence presents a complex valuation challenge for market participants.

Users should be aware of several critical risk factors that could significantly impact Meta’s valuation:

1. Regulatory Enforcement Risk
   : The SEC investigation could result in substantial fines and mandatory changes to Meta’s ad approval systems [2]
2. Revenue Quality Risk
   : Potential elimination of $16 billion in scam ad revenue would represent approximately 10% of total revenue [2]
3. Reputational Damage
   : Continued association with fraudulent content could erode user trust and advertiser confidence
4. Competitive Disadvantage
   : Stricter enforcement could push revenue to competitors with more lenient policies

Investors should closely monitor:

1. SEC investigation timeline and potential outcomes
2. Changes in Meta’s ad enforcement policies and their revenue impact
3. Analyst rating revisions following regulatory developments
4. Institutional investor behavior and position changes
5. Competitive positioning relative to other digital advertising platforms

The investigation reveals deeper structural challenges facing Meta’s business model. The company’s reliance on questionable revenue sources while maintaining strong underlying fundamentals creates a complex risk-reward profile that requires careful assessment of regulatory compliance costs versus growth opportunities.

Meta Platforms faces significant near-term challenges following revelations about scam ad revenue sources, with shares declining 17.5% over the past week and Zuckerberg falling to sixth-richest globally [0][1]. The company internally projects $16 billion in revenue from scam advertisements, representing 10% of 2024 revenue, while ongoing SEC investigations create substantial regulatory uncertainty [2].

Despite these concerns, Meta maintains strong financial fundamentals with 30.89% net profit margins and analyst price targets suggesting 35.7% upside potential [0]. The stock’s current valuation reflects a significant risk premium for potential regulatory enforcement, creating a complex investment scenario that balances strong underlying business metrics against substantial compliance and reputational risks.

Market participants should recognize that the current situation involves both significant risks and potential opportunities, depending on regulatory outcomes and the company’s response to compliance challenges. The divergence between analyst targets and market pricing reflects uncertainty about the ultimate impact of regulatory actions on Meta’s business model and revenue streams.