Facebook's Billion-Dollar FTC Fine: How Worried Should Investors Be?

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Three billion dollars may sound like an awful lot of money, but when you're a giant tech firm generating $56 billion a year in revenues, it's a lot less significant.

That was the attitude that Facebook (FB) - Get Report investors and analysts seemed to be taking this week after the social network reported robust first-quarter results, while saying that it was putting aside $3 billion to pay for an expected penalty to the Federal Trade Commission for violating a 2011 privacy consent decree. That decree was related to Facebook's failure to protect its users' data, which the FTC says it violated with its inappropriate sharing of user data with Cambridge Analytica, among other cases. Facebook said that the eventual penalty could be as much as $5 billion or more.  

Despite the seemingly huge penalty, Facebook shares rose sharply the day after the earnings results were announced. 

"I think, for a long time, markets have assumed that the company will get some large fines related to its various privacy scandals," said TheStreet and Real Money tech columnist Eric Jhonsa.

To listen to the full episode of Jhonsa discussing Facebook's overall earnings report, as well as those of Microsoft's and Tesla's, with Action Alerts Plus analyst Zev Fima, please see below.