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Meta estimates that it earns 10% of its revenue from scams, report says

1. Meta projected $16 billion from fraudulent ads, 10% of revenue. 2. Failure to protect users from illegal ads for three years. 3. Meta only deactivates accounts at 95% fraud certainty. 4. Company claims 58% reduction in user reports of scam ads. 5. Over 134 million scam ads removed in past 18 months.

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FAQ

Why Bearish?

The significant revenue from fraudulent ads raises regulatory concerns, similar to past scrutiny faced by social media companies, which can impact stock values negatively.

How important is it?

The article highlights critical operational issues affecting Meta's revenue stream and regulatory stance, making it quite relevant.

Why Short Term?

The news may lead to immediate scrutiny and pressure on advertising practices, affecting quarterly earnings outlook.

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