Meta defends key $600 support as leaked scam ad report triggers sharp selloff

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Meta leaked scam ad report

Highlights

- Meta falls sharply, closing near $621 after breaking key trendline support.

- Leaked report claims up to 10% of annual ad revenue tied to scam or banned content.

- $600–$615 now forms the critical support zone that decides whether the correction deepens.

Buyers stepped in at this level despite renewed controversy from leaked internal documents alleging that Meta generated billions in revenue from scam and banned advertisements. The decline marks Meta’s sharpest momentum reversal since summer, fueled by both technical damage and mounting reputational risk. The stock had been one of the strongest large-cap performers through 2025, rising on AI investment optimism and robust ad revenues, before the recent selloff shifted sentiment decisively.

Technical breakdown signals loss of trend control

The chart shows a clean break of Meta’s rising trendline from April, a key structural line that supported every leg of the 2025 advance. Price also fell below the 20-day and 50-day EMAs, signaling that short-term traders have abandoned the uptrend. The Parabolic SAR flipped above price, confirming a bearish reversal. Wide-bodied red candles with minimal intraday recovery indicate forced selling—a sign of stop-loss triggers and institutional unwinding rather than gradual distribution.

Meta stock price dynamics (Source: TradingView)

The $600–$615 band now represents the last stronghold for buyers. It overlaps with prior breakout levels and sits just above the 100-day EMA near $684 and 200-day EMA near $677. A decisive close below $600 would expose the next liquidity zone around $560, the last area where strong accumulation occurred earlier in the year. On the upside, any rebound faces immediate resistance near $685, where the 20- and 50-day EMAs converge. Meta must reclaim this zone to shift the tone from breakdown to base-building.

Controversy adds pressure to valuation

The leaked documents have deepened investor unease. Reports suggest Meta knowingly profited from scam and banned ads, with internal systems allowing repeat offenders to continue advertising despite violations. The potential exposure—estimated at up to 10% of annual ad revenue—raises questions about compliance and platform oversight. Regulators could respond with probes or tighter disclosure requirements, both of which would add friction to growth.

For investors, the issue extends beyond short-term headlines. It touches Meta’s credibility in maintaining ad integrity and user trust, two pillars of its business model. The market has reacted swiftly, pricing in additional legal and reputational risk alongside the technical breakdown.

In prior analysis, the $600–$615 region was identified as a key structural base where long-term funds had consistently accumulated shares. History shows that Meta’s past controversy-driven pullbacks—from the Cambridge Analytica scandal to privacy lawsuits—eventually gave way to strong recoveries once panic faded. If the stock can hold this demand zone and reclaim lost moving averages, a rebound toward $740–$760 becomes feasible. Losing $600, however, would confirm a deeper correction phase.

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