Meta Platforms’s Acquisition of VR App Maker Within on Hold Amid FTC Lawsuit
August 10, 2022
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Meta Platforms ($NASDAQ:META) has agreed to put a hold on its planned acquisition of VR app maker Within amid a lawsuit from the Federal Trade Commission looking to block the deal, Bloomberg reports. Company and government lawyers have told U.S. District Judge Edward Davila that the acquisition won’t close until Jan. 1 or the court rules on an injunction blocking the deal, whichever comes first. Meta Platforms has said that the acquisition would not harm competition because the two companies are not direct competitors. It is not yet clear how this legal battle will affect Meta Platforms’s market and earnings in the long term.
However, it is certainly a setback for the company’s plans to expand its VR offerings.
The lawsuit alleges that Meta Platforms engaged in anticompetitive practices in the VR market, and the acquisition is on hold until the case is resolved.
Meta Platforms is a strong company with good fundamentals. Its asset, growth, and profitability are all strong, while its dividend is weak.
However, it has a high health score of 8/10, indicating that it is capable of paying off its debt and funding future operations.
Investors may be concerned about the potential regulatory issues surrounding Meta Platforms’s acquisitions. The company has been under scrutiny by the FTC for a number of its past acquisitions, and it is possible that the agency could block this deal as well. Another concern for investors is the potential impact on Meta Platforms’s user base. The social media giant has been losing users in recent months, and adding a VR app could further alienate some users. Investors should be cautious when considering an investment in Meta Platforms at this time.
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