This is my thinking as well. If I own stock of Coca Cola and Pepsi. Coca Cola comes up with a great product that eats a huge amount of market from Pepsi. According to this I sue Coca Cola for my losses on the Pepsi stock?
If, however, Coca Cola's actions harmed Pepsi specifically but benefited the overall portfolio, then no damages would be pursued.
So Coca Cola is welcome to take market share from Pepsi so long as doing so is a net benefit to a diversified portfolio, as opposed to doing so in a way that harms a diversified portfolio.
It would be the end of innovation.
What would no longer be rewarded is parasitism.
At any rate, if a company found a cure for cancer the stock market would absolutely skyrocket in a way almost never before seen. It's unbelievably hard to imagine how a company finding a cure for cancer would be to the detriment to a diversified portfolio.
Even if it's a tossup, does that mean there's a 50% chance of the inventor of such a cure being liable for that crash?
The issue here is that it's not a tossup. The probability is >=2:1 hence the liability, even if that is alive after the plunge.
The specific complaint is that Meta ignored the concerns raised by its shareholders about the impact of its actions on the broader portfolios held by its shareholders.
Once again I do not think this case has merit, and lawsuits of this nature almost always fail, but we should at least take some time to understand what is actually being pled so that we can object to it with a firm standing.
The idea is deeply deeply broken, essentially, "everyone should care about everything according to some notion of a portfolio i think is normal".
This is one of the craziest stances/lawsuits I’ve ever read. Boglehead thought has taken over so much that the shareholders are referring to a nebulous diversified portfolio as something that somehow must be protected by law. That’s too far out there.