August 2012 Protocol ALID: 66703 After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? Perhaps it was the re-naming of the company to Meta that caused the world to conclude that you were spending 100% of your time on Reality Labs instead of AI or the core business. If they do it, I think the stock can be up over 50% between now and the end of the year. In his open letter, Gerstner asked Meta to cap its expenditure on the metaverse to $5 billion a year from the current announced investment of $10-15 billion. Bill Ackman's: Pershing Square Capital Management. Tesla recalls 3,470 Model Y vehicles over loose bolts, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D'Silva, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, Exclusive: Snapchat kicks few children off app in Britain, data given to regulator shows, Exclusive news, data and analytics for financial market professionals. I don't think they can. We know they have high EBITDA margins on the rideshare business which is dominant across the region. I mean, we're talking about billions of dollars in revenue but you left that out. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Activist investor Brad Gerstner, founder and CEO of tech-focused hedge fund Altimeter Capital, sent an open letter to CEO Mark Zuckerberg in October calling for a pullback in metaverse spending. JavaScript in your web browser. And what is going to be the resolution to the situation in the Ukraine? It will get there three years from now because it's free cash flow margin will continue to expand and if you just get it, give it the multiples that are currently in the market, right, that have already drawn down on free cash flow, you get to that 3X that I quoted. At the same time that Meta ramped up spend, you lost the confidence of investors. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . And frankly, they weren't a very good hedge because bonds haven't moved all that much but gross stocks are down 60, 70, as you mentioned, down over 80%. We have little doubt investors and others would happily support scaling up these investments as the ROI becomes more tangible even if still long-term. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Adani Group on Thursday said US-based boutique investment firm GQG Partners has picked up equity stakes worth $1.87 billion (15,446 crore) in four listed group companies Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission and flagship Adani Enterprises via secondary share sales. Meta shares moved 6% higher following the announcement. The average tech IPOs down almost 50% from last year, SPACs much worse, direct list bad, all stocks that were taken public last year now it's clear were overvalued relative to where the world is trading them today. Altimeter Capital owns about 2.46 million Meta shares. FREE Breaking News Alerts from StreetInsider.com! We believe in this team. Despite public skepticism at times warranted we have been supporters With all of this said, we truly believe that the company should be making some of these important investments. "We think the recommendations outlined above will lead to a leaner, more productive, and more focused company a company that regains its confidence and momentum," Gerstner wrote. Indias general insurers are looking to set up a larger marine insurance pool to cover the risks of transporting crude oil, edible oil, project machinery and fertiliser from the war-torn Russia-Ukraine region. In addition, people are confused by what the metaverse even means. But the company's dreams have fallen short as the Reality Labs unit, which works on augmented and virtual reality, has continuously reported staggering losses. Before we we move, what do I do with Facebook? Altimeter Capital Management is a technology focused investment firm based in Menlo Park, CA and Boston, MA. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. They just announced that they're going to be profit, full company profitable by 2023. But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. "In short, Meta needs to get fit and focused.". Do they want to stand with me and ride that out? The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Two years from now, people are going to be looking back and say, why the hell didn't you buy Snowflake at 160 bucks a share? Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Over the last three years, Meta has also dramatically increased its capital expenses. I remember people asking that question about Amazon. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. In fact, our internet stock index is at a 10-year low and software is back nearly where we were in 2016 before the rerating of software occurred. Meta. Last fall, Brad Gerstner from Altimeter Capital published an open letter, telling Meta it has "lost the confidence of investors" and telling the company to throw in the towel on its metaverse project. Why didn't you buy, you know, Uber at 28 bucks a share? Rates are going up and we have a war. "New Prices for Meta Quest 2s 256GB SKU + Meta Quest Pro. Capitalizing on the fund's VC success, Gerstner raised $450M for Altimeter Growth Corp (AGCUU), a blank check company IPO targeting the tech sector. Our contact information, solely for purposes of this Adherence Letter (and unrelated to the Questionnaire delivery options in the subsequent section) is: We consent to the publication of a conformed copy of this letter by ISDA and to the disclosure by ISDA of the contents of this letter. As you know we entered the year with a big bond short, we've now covered that bond short because we don't think that it's possible for the Fed to raise rates 7,10, 12 times as some people think this year. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. From Grand Teton to Universal Speech Translator to Make-A-Video, we are witnessing a Cambrian moment in AI, and Meta is no doubt well positioned to help invent and monetize that future. GERSTNER: So let's talk for a second about what I called. The cumulative benefit of the recommended adjustments outlined above would increase FCF by at least $20B in 2023 ($10B from people-related expense reduction, $5B from capex reduction, and $5B from reduced metaverse spend). Some companies require tremendous capex investment to maintain their existing business. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. United has an Underqualified, Ineffective, and Entrenched Board: While presiding over United's stunning long-term underperformance, we believe that the incumbent Board (and a majority of the newly-expanded 15-person Board): (1) lacks sufficient leadership, expertise, and experience to challenge management and hold management accountable, to direct an operational and financial turn-around, and to maximize stockholder value; (2) has entrenched itself by implementing various mechanisms to financially penalize stockholders for making meaningful Board changes; (3) has failed to adequately align management compensation with stockholder interests; and (4) is too stale to effectively represent stockholders. About Altimeter Capital Altimeter is a global investment firm managing both public and private funds focused on the airline, travel, technology, internet, software, and consumer sectors. Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. As you know, we are long-term shareholders. A ltimeter Growth Corp. 2, the second blank check company formed by Altimeter Capital targeting the tech sector, filed on Thursday with the SEC to raise up to $200 million in an initial public. But I think if you have a time horizon over the course of the one to three years, we see a lot of stocks in our universe that we not only think are going to end the year higher, but we think are going to be multiples higher as we look out over the next two to three years. These times are what try people if you dig a hole and get into the hole here at the bottom after having lost, you know, my sense is you're locking in losses that you're going to come to regret. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! Meta needs to regain the confidence of investors, the public and employees, Altimeter Capital Management CEO Brad Gerstner said Monday in an open letterto Zuckerberg. If you look at, if you look at, you know, what we expect to occur over the rest of the year, this stock will compound as it continues to beat earnings, as it continues to expand its use cases, even without multiples expanding, right, as investors begin to look at those higher numbers in '23 and '24. Dont miss out on ET Prime stories! Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. ", Medium.com. And so we add on a fair amount of exposures we entered this year. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. And, while most companies will struggle to monetize AI, we believe Meta is incredibly well positioned to leverage AI to make all of its existing products better. Can they maintain their growth momentum? The purpose of this letter is to confirm our adherence as a Protocol Participant to the ISDA 2021 SBS Top-Up Protocol Agreement as published by the International Swaps and Derivatives Association, Inc. on February 25, 2021 (the Protocol Agreement). We can just go through the list, Uber, Facebook, Roblox. We do not take job reductions lightly. We have little doubt investors and others would happily support scaling up these investments as the ROI becomes more tangible even if still long-term. WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. We'll see you soon. Altimeter Capital Management, LLC. We didn't think that was durable. When you look at these questions, it comes down to this. As such, we think Meta company should cap its metaverse investments to no more than $5B per year with more discrete targets and measures of success, as opposed to todays much more ambitious and open-ended strategy. Right. There isnt a day that goes by where I dont find myself using Metas products to communicate, to connect, and to entertain still amazed at the power of these services. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; How many dogs want to eat the dog food? And as a result, you know, last year we held up better than most because we own high-quality stocks, and we were short lower quality stocks. If the deal goes through, it. QUARTERLY LETTER 2022 | Vol.1 1345 AVENUE OF THE AMERICA S 33RDFLOOR NEW YORK, NY 10105 HAYDENCAPITAL.COM HAYDEN CAPITAL 2 May 20, 2022 Dear Partners and Friends, The last six months have been extremely painful - by far, the worst period since we started Hayden. This will alert our moderators to take action. Chief Executive Officer Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . And Meta certainly has abundant financial resources to invest and / or return to shareholders. WAPNER: I want to take a look at the stock in "Overtime" here because I think you're moving in I'm looking at what looks to be a higher move as we're having this conversation and that brings me frankly, now to Facebook. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. This is a company that only did 1.2 billion in revenue last year. effective risk management for all users of derivative products. Altimeter Growth Corp., the blank-check company merging with internet giant Grab Holdings Inc., is hovering just a few cents above its record low after cratering 28% since the deal was unveiled in . WAPNER: We're back now with Altimeter Capital's Brad Gerstner hanging out with us at "Overtime" today, You know, we talked about the magnitude Brad by which some of these stocks have come down and I'm looking at the, listen, it's not just Meta, obviously. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Meta has spent billions and hired thousands of employees around the world to build the metaverse, which refers to a shared digital environment that uses augmented or virtual reality technology to make it feel more realistic. Chicago, IL 60606 That's why even the sell side consensus numbers have their growth rate accelerating, almost doubling between Q2 and Q4 of this year and we think it will accelerate even faster. We're down on the year. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. This company is perfectly positioned to capitalize on that they have the, the ad network to monetize it. I don't think Mark did a particularly good job of explaining the meta investments. We are generally patient investors. The last 10 years have been a unique time in tech and for Meta. Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . It did not specify which of Alitmeter's SPACs Grab was in talks with. A Division of NBCUniversal. Brad Gerstner, Altimeter's chair who encouraged aggressive investment in artificial intelligence, said the firm wanted to engage with Meta and did not have any demands. As such, we think during this period of growth transition and economic uncertainty, the company should decrease capex by at least $5B and maintain this discipline until revenues re-accelerate bringing our capex as a percentage of revenue more in line with our large cap peers. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. Altimeter.com is Altimeter's only website. See here for a complete list of exchanges and delays. And we've had government intervention of the magnitude. Regrettably, our efforts have led to our complete loss of confidence in the current Board, and to our firm determination that meaningful, stockholder-directed Board change is urgently required to serve the long-term best interests of United's stockholders, customers, and employees. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. I have been told that Amazon spent far less in total to build AWS. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. This is a leading internet company in Southeast Asia. The company has lost investor confidence as it ramped up spending and pivoted to the metaverse, the technology-focused hedge fund with a 0.1% stake said, and suggested a three-step plan. What is the rate of increase? Global Business and Financial News, Stock Quotes, and Market Data and Analysis. [2] The firm focuses on technology investments in both public and private markets globally. FTX's list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield,. I hear you but look, there are, there are some people who think and it's not maybe it's not a Snowflake, but it's a you know, a basket of these kinds of names that may never get back. The comp against IDFA was very difficult in Q1 and will again be difficult in q2. We also reference original research from other reputable publishers where appropriate. It's a better version of Zoom. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors) | by Brad Gerstner @altcap | Medium 500 Apologies, but something went wrong on our end.. On top of that we had supply chain challenges. And so that will be rolled out in Q2 and Q3. 2023 CNBC LLC. Industry Trends on 4000+ Stocks, Pro Investing by Aditya Birla Sun Life Mutual Fund, Canara Robeco Equity Hybrid Fund Direct-Growth, Cut workforce, spending on metaverse, key investor tells Mark Zuckerberg. The same is true for Microsoft, right? Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (META) and Mark Zuckerberg Article Related Articles ( 4) Stock Quotes (1) October 24, 2022 8:20 AM EDT Tweet Share E-mail Get. Altimeter Feb 2021 - Present2 years 2 months New York, United States Chris is a Partner at Altimeter on the private investing team where he focuses on investing in iconic late stage technology. But the fact of the matter is the entire market has evaporated around these types of stocks. That's because enterprises love their product. I've got some people including a guy coming up in a little while Mike Wilson who suggested at this point bonds may be a better deal than stocks. The Meta investor recommends a plan to get the company's "mojo back.". If you really think about what the metaverse is in the first instance, it's a better version of what you and I are doing right here. Conforti plans to join a new firm as a co-founder with. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . Every company I talked to is tightening its belts. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. To set a new and better course for the Company, and to give United stockholders the opportunity to elect the Board they deserve, Altimeter has delivered to you a notice today indicating its intention to nominate six highly qualified professionals led by former Continental Airlines CEO Gordon Bethune to the United Board at the 2016 annual stockholder meeting. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 233 South Wacker Drive At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. +Includes DocuBay and TimesPrime Membership. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/03/14/we-could-go-lower-before-we-go-higher-in-stocks-says-altimeter-capitalas-ceo-brad-gerstner.html. The offers that appear in this table are from partnerships from which Investopedia receives compensation. They're building their own ad platform, right, that can deal with this. The lagging stock price under this Board's control and supervision directly reflects substantial underperformance in terms of operational reliability, customer satisfaction, market share, profitability, and return on invested capital. Facebook's revenues in Q1 were lower than people expected. The Meta investor recommended a plan to get the company's "mojo back," including reducing headcount expenses by 20% and limiting the company's pricey investments in "metaverse" technology VR software and hardware to no more than $5 billion per year. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. "Jitesh Ubrani: Tweet From March 3, 2023. And, while most companies will struggle to monetize AI, we believe Meta is incredibly well positioned to leverage AI to make all of its existing products better. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. Now they've told us that they're going to achieve 15% free cash flow margins this year, five years early, right, while still growing 100%. GERSTNER: Well, the first thing I would say is this, set aside SPAC. How big are the margins, ultimately Snowflake will be worth a lot more because there is almost endless demand for the product and this is a business that is highly profitable. Altimeter said annual free cash flow can be doubled to $40 billion if it cut headcount by at least 20%, trimmed capital expenditure by at least $5 billion to $25 billion a year and capped annual investment in the metaverse to $5 billion instead of the current $10 billion. I think that this is a business that is investing in the right things. To accomplish this goal, we recommend a three step plan that will double FCF to $40 B per year and focus the companys teams and investments: Getting Fit Headcount Reduction / Expense Control. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Altimeter Capital Management is a hedge fund with 17 clients and discretionary assets under management (AUM) of $17,950,309,162 (Form ADV from 2022-05-27). FalconX Raises $210M Following 30x YoY Revenue Growth; Now Valued at $3.75 Billion Series C Led by Altimeter Capital, B Capital Group, Sapphire Ventures, and Tiger Global Management, with. What am I supposed to think about that? Capital October 20, 2022 Risk & Capital. In fact, in the most recent quarter, they added 1.4 billion of contracted value. As I look at it, the market is now pricing in at least seven rate hikes. These are not numbers on a spreadsheet. It's been a big drawdown this year. Grab Holdings is reportedly in talks to go public through a merger with a "blank check" company that could value the Southeast Asian ride-hailing startup at as much as . He left GC and became co-CEO of NLG, an early online travel start-up purchased in part by IAC.He co-founded Openlist.com, a local search start up that was self-funded and sold to Marchex (Nasdaq: MCHX);He was a partner at PAR Capital, a multi-billion hedge. We have no stimulus checks.
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