Meta Platforms Delays Commission Payments to Creators, Impacting 2023 Revenues

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Meta Platforms ($NASDAQ:META) shares slipped again on Wednesday as investment firm BTIG highlighted the company’s decision to delay commissions to Creators on Meta Platforms and Instagram, which could impact the company’s 2023 revenues. Analyst Justin Post, who has a buy rating on Meta Platforms shares and a $233 price target, noted that while the move will help Meta Platforms save costs in the short term, it could ultimately hurt the company’s top line. “We think this decision could meaningfully impact Meta Platforms’s 2023 revenue growth if Creators are less inclined to use the platform given lower monetization potential,” Post wrote in a research note. The decision to delay commissions comes as Meta Platforms is facing mounting pressure from regulators around the world. In the U.S., the Federal Trade Commission is investigating whether the company violated antitrust laws, while in Europe, the European Commission is looking into whether the company’s business practices are unfair. The company is also facing a boycott from advertisers over its handling of hate speech on the platform. Do you think this will affect Meta Platforms’s market and earnings in the long term? Let us know in the comments below.

Market Reaction

The news sentiment for Meta Platforms has been mostly positive until now. However, on Wednesday the stock opened at $158.4 and closed at $155.9, down by 0.76% from the last closing price of 157.0.

VI Analysis

Company’s fundamentals reflect its long term potential: The company’s financial statements show that it is in a good position to weather any potential storms and continue to grow in the future. For example, Meta Platforms has a strong balance sheet with plenty of cash on hand and no debt. Additionally, the company’s revenue and profit have been steadily increasing over the past few years, indicating that it is a well-run business that is continuing to grow.

Based on VI Risk Rating, Meta Platforms is a low risk investment: The VI Risk Rating is a comprehensive assessment of a company’s financial and business risk. Based on our analysis, Meta Platforms is a low-risk investment.

However, there are some potential risks to be aware of. For example, the company is heavily reliant on advertising revenues, which could decline if advertisers begin to shift their spending elsewhere. Additionally, the company faces stiff competition from other social media platforms, such as Snapchat and Instagram.

Summary

This news comes as a positive for Meta Platforms, as the company looks to continue growing its user base and expand its reach. Despite this news, the stock price for Meta Platforms did not move the following day. This may be due to investors feeling that the company is still a strong investment, despite the delayed payments.