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Mark Zuckerberg once suggested spinning out Instagram as a solution to its ‘cannibalization' of Facebook

1. Zuckerberg's email warns Instagram may cannibalize Facebook's growth. 2. Instagram's rise leads to Facebook engagement decline, risking overall network viability. 3. Zuckerberg suggests enhancing integration across Meta's apps to mitigate risks. 4. FTC's antitrust trial may force Instagram and WhatsApp spin-outs, echoing Zuckerberg's concerns. 5. Meta downplays emails, claiming FTC's case is weak and out-of-context.

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FAQ

Why Bearish?

The potential spin-out of Instagram and WhatsApp could diminish Meta's overall value. Historical cases, like the breakup of AT&T, show how spin-outs can negatively impact stock prices in the short term.

How important is it?

The article highlights critical strategic concerns about cannibalization. Investors should closely monitor the FTC trial's developments due to their significant implications for Meta's structure.

Why Short Term?

Immediate investor concerns over FTC trial outcomes can influence Meta's stock price quickly. Similar antitrust concerns have previously led to rapid sell-offs in affected companies.

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