Meta Platforms slips again as BofA highlights delay in Creator commissions
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Meta Platforms (NASDAQ:META) shares slipped again on Wednesday as investment firm highlighted the company's decision to delay commissions to Creators on Facebook and Instagram, which could impact the company's 2023 revenues.
Analyst Justin Post, who has a buy rating on Meta Platforms (META) shares and a $233 price target, noted that the delay is likely less than 1% of next year's revenues, but the monetization features that were announced on Tuesday, such as paid online events, subscriptions, newsletters and badges, may help grow its burgeoning community. 
"Once a brand finds a creator that they want to partner with, they can send a project with the details to them, including information about deliverables and payment," Post wrote in a note to clients.
Meta Platforms (META) shares fell nearly 1.5% to $154.87 in premarket trading. 
Post also noted the weakness in Meta Platforms (META) shares on Tuesday, as they fell 4% when the broader market and NASDAQ both rose sharply. The analysis suggested the drop may have been due to "investor repositioning in anticipation of upcoming Russell rebalance," which is slated to happen on Friday, as well as concerns on Reels monetization and continued fears of competition from ByteDance's (BDNCE) TikTok. 
"We believe, forgoing revenue sharing commissions till 2024 will have a small impact on revenues, while potentially helping Meta capture more creators on the platform as other platformsâ incentive programs are less developed (Meta already has a $1B Creator incentive program, biggest in sector)," Post added.
The analyst added that Meta (META) is expected to ramp up the ad load on its Reels product in the second half of this year and 2023, with the net benefit being "a tailwind for top-line growth."
Separately on Wednesday, TF International Securities analyst Ming-Chi Kuo tweeted that he cut his estimates for Meta's (META) virtual reality headset shipments by 25-35% to 7-8 million units, as the company is reducing hardware investments and the continued risk of a recession. 
On Tuesday, the Justice Department said it had settled a lawsuit with Meta Platforms (META) over discriminatory advertising for housing.