As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. This is a company that only did 1.2 billion in revenue last year. That's what makes markets. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 2023 International Swaps and Derivatives Association, Inc. In short, Meta needs to get fit and focused. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. In short, Meta needs to get fit and focused. While the increased AI investment was clearly well timed, Metas investment in the metaverse, while smaller than the AI investment, has gotten the most attention and has led to much confusion. So we're in the neighborhood of a tradable bottom. Wall Street closes sharply higher, notches weekly gains as Treasury yields ease, Morgan Stanley reaffirms Top Pick on Apple (AAPL) stock, sees catalyst-rich event path, Amazon (AMZN) pausing construction on second HQ in Virginia - Bloomberg, Broadcom Q1 results & guidance beat estimates; analysts praise 'stellar' execution, Dell reverses early gains on soft outlook; analyst reactions mixed, Embark Trucks (EMBK) to reduce workforce, explore strategic alternatives including liquidation, Ford Motor (F) Declares $0.65 Special Dividend; 4.5% Yield, Crypto firms behind Tether used falsified documents to maintain banking system access - WSJ, Altamira Therapeutics (CYTO) Reports Study Showing Bentrio's Superior Nasal Residence Time and Rheological Properties, Desktop Metal (DM) jumps on chatter of deal with Apple, Midday movers: C3 AI, Costco, Zscaler and more, Dell, Zscaler, ChargePoint fall premarket; Tesla, Hewlett Packard rise, After-hours stock movers: C3.ai jumps on results, Zscaler falls, Macy's, Salesforce and Okta rise premarket; Silvergate, Tesla fall, After-hours movers: Salesforce surges on beat, Silvergate falls on 'going concern' warning. Paul A. Reeder Moreover, Meta has industry leading capabilities in key future technologies like artificial intelligence and immersive 3d that will help drive new products and future growth. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. With the gains posted on March 3, Meta Platforms shares are up 54% this year. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. I mean, two years ago we were we were having this conversation. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! As you know, Altimeter Capital Management and PAR Capital Management are long-term United Continental Holdings, Inc. ("United") stockholders that together own approximately 7.1% of United's outstanding common stock. FTX's Bankman-Fried Quietly Invested More than $500 Million in Sequoia 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. About Altimeter Capital Altimeter Capital owns about 2.46 million Meta shares. "In addition, people are confused by what the metaverse even means," Gerstner wrote. ISDA fosters safe and efficient derivatives markets to facilitate Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (META) and But far from being a bad decision, 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. 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. 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 Management LLC. We are confident that these employees will find replacement jobs and quickly be back to work on important inventions that will move us all forward. Meta and other large companies have made it very difficult for start-ups to hire. He said a 20% cut in employee spending would take Meta back to the levels of staffing it had last year and argued that the company can't spend as it used to since the cost of capital and interest rates have risen recently. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Board of Directors 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 . I don't think they can. I don't think Mark did a particularly good job of explaining the meta investments. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. And for us, we consolidate behind the things we have deep conviction in with confidence they're going to be worth more in the future. 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%. Your Reason has been Reported to the admin. Altimeter Capital Management, LP - International Swaps and Derivatives We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. At the end of the second. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. 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. Meta shareholder Altimeter urges Facebook parent to cut down jobs, expenses August 2012 Protocol ALID: 66703 It includes reducing headcount expenses by 20% and limiting the company's pricey investments in "metaverse" technology to no more than $5 billion per year. Brad Gerstner's Phone Number and Email Last Update. Altimeter.com is Altimeter's only website. 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. Facebook's revenues in Q1 were lower than people expected. The vast majority of the capex has been an essential and high-returning investment in data centers, Nvidia GPUs and other AI resources to solidify the companys position as one of worlds leaders in AI. I mean, we're talking about billions of dollars in revenue but you left that out. Dave Baszucki of Roblox describes the metaverse as the natural evolution of communication a multi-device world, including the phone, that is best thought of as a better version of text, video, and voice that will make us feel more connected. The silver lining is that unlike many companies, this popular narrative obscures the truth. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. United Stockholders Altimeter Capital and PAR Capital Express Meta shareholder wants Facebook parent to cut jobs, spending March 2013 Protocol ALID: 66704. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Right? This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. Over the last three years, Meta has also dramatically increased its capital expenses. WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: Their last reported 13F filing for Q4 2022 included $3,652,571,000 in managed 13F securities and a top 10 holdings concentration of 99.95%. See the Top Performing Hedge-Funds > Brad Gerstner . Musk Made a Mess at Twitter. This compensation may impact how and where listings appear. Meta stock is down over 61% in 2022. Whether it is making Whatsapp more seamless or making content and ads more useful on Instagram, Reels and Facebook AI is a globally scarce resource that already is driving noticeable improvements for Metas three billion customers and advertisers. Some companies require tremendous capex investment to maintain their existing business. Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo It has 24 billion in free cash they're going to generate this year. If you look at the company, it's now trading at $5 billion enterprise value. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? They were buying goods, soccer balls on DICK's Sporting Goods and candles on Williams Sonoma. The conventional wisdom press and investor is that the core business hit a wall last fall. 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. Meta reported in February that Reality Labs lost $13.72 billion in 2022. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. When you look at these questions, it comes down to this. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. Bruce Berkowitz's: Fairholme Capital Management. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. We do not take job reductions lightly. We have $130 oil and $6 gas at the pump. The bet . ALTIMETER CAPITAL MANAGEMENT, LP Top 13F Holdings - WhaleWisdom.com Altimeter Capital partner Kevin Wang led the firm's investment in cloud data platform Snowflake in 2015 in its $45 million Series C round; he sat on its board until 2020. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. Like many other companies in a zero rate world Meta has drifted into the land of excess too many people, too many ideas, too little urgency. SCOTT WAPNER: Now let's move to an exclusive interview with a marquee investor who saw the destruction in tech coming, Altimeter Capital's founder and CEO Brad Gerstner. Altimeter Capital Chair and CEO Brad Gerstner said in an open letter to the company and CEO Mark Zuckerberg on Monday that Meta has too many employees and is moving too slowly to retain the confidence of investors. committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). Meta. Altimeter is based in California and has about $16 billion in . Open letter: Altimeter Capital founder and CEO Brad Gerstner encourages Meta to cut capex by $5B+, cut headcount by 20%+, and limit metaverse R&D to $5B/year As you know, we are long-term shareholders. We understand that the Protocol is designed to amend only those Protocol Covered Agreements between two Adhering Parties that were previously amended pursuant to the terms of the August 2012 Protocol, the March 2013 Protocol or both. They are people with families and kids to support. 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%. Is it close to being done? What Does Metaverse Mean and How Does This Virtual World Work? I remember people asking that question about Amazon. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Welcome to "Overtime.". 2-Year Whatever the reason, that is certainly the perception. Benchmark Reform and Transition from LIBOR InfoHub, Use of Chinese Government Bonds as Margin, Updated OTC Derivatives Compliance Calendar, ISDA-Clarus RFR Adoption Indicator: January 2023. c/o Chairman Henry L. Meyer III Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. It just launched in 150 countries, has over a billion views. c/o Altimeter Capital Management, LP. Meta. The stock is 51% off of its high. . The company explained that its goal has always been to "create hardware that's affordable for as many people as possible to take advantage of all that VR has to offer." Samooha, a startup developing a "cross-cloud" data collaboration platform, today announced that it raised $12.5 million in a funding tranche backed by Altimeter Capital and Snowflake Ventures . Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. SPACs notched more than $70 billion so far in 2021, a new record. b***@altimeter.com. The facts are startling. 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. CAPEX Investing Aggressively and Responsibly in the Future of AI. FalconX Raises $210M Following 30x YoY Revenue Growth; Now Valued at $3 Brad, thank you. Brad Gerstner's Altimeter Capital has an $8B profit on Snowflake. A new You know, I told people at the time that, you know, there's risk in making these investments, right, we're shareholders of this, we've lost capital. effective risk management for all users of derivative products. . What do you think? Those three companies are all down that amount because it turns out that this year people got off their couch, they went out and they went to restaurants and they went in and did things instead of buy things. But far from being a bad decision, 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. It can do great this, the business can be incredible. 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. Grab to list in US via $40 bln merger with Altimeter Growth If they do it, I think the stock can be up over 50% between now and the end of the year. Right. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking With SNOW currently trading at $242, that stake is now worth $8.8 billion. And we've had government intervention of the magnitude. After the pandemic, hospitals are now on a strong footing. We were wrong. And what is going to be the resolution to the situation in the Ukraine? 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. You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. And, while that ultimately is an important long-term measure of success for all of Metas stakeholders, it would be imprudent to make short-term bad decisions just to improve the share price. Meta Slashes Prices for VR Headsets And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. But listen, there's massive uncertainty in the world. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? I can't tell you what's going to happen the next three days or the next three weeks or even three months. 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. Chicago, IL 60606 Let me tell you the bear case on Facebook, okay, the bear case on Facebook and other ad models like Google is that we're running headlong into a massive recession. Altimeter Capital. Chris Conforti - Partner - Altimeter | LinkedIn Altimeter Capital Management LP now owns 2,850,000 shares of the Internet company based in Singapore's stock worth $131,784,000 after purchasing an additional 1,600,000 shares during the last quarter. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and The reductions for the Quest Pro start March 5 in the U.S. and Canada, and on March 15 in other countries where it is supported. Credit Derivatives Determinations Committees, how to enable Do they want to stand with me and ride that out? Contact. Following careful consideration, we have firmly concluded that meaningful change to United's existing Board of Directors is urgently required in order to reverse long-standing poor Board governance and the resulting many years of substantial and inexcusable Company underperformance relative to United's competitors. The last 10 years have been a unique time in tech and for Meta. We dont have any demands. Chase Coleman's: Tiger Global Management. These include white papers, government data, original reporting, and interviews with industry experts. They just announced that they're going to be profit, full company profitable by 2023. Altimeter Capital Management LP. PDF QUARTERLY LETTER - Hayden Capital 2023 Benzinga.com. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. H1 Raises $100M Series C to Expand Footprint, Make H1 the The deal values the combined company at $35 billion and will. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? But it's good to be here and and you know, while I think we we did see the normalization and multiples as a likely outcome toward the end of last year. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . If the company were investing $12B per year into this project, then that confusion might not even be a problem. Brad Gerstner Wiki: Facts about the CEO OF Altimeter Capital ET on GuruFocus.com Builders Union LLP Buys AppLovin Corp, Match. That stuff was being advertised on Instagram. So were Shopify's and so were PayPal. Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. Southeast Asia's largest ride-hailing company, Grab Holdings, said Tuesday that it plans to merge with U.S.-based Altimeter Growth Capital in a deal that would value it at nearly $40 billion and . We hereby appoint ISDA as our agent for the limited purposes of the Protocol Agreement and accordingly we waive, and hereby release ISDA from, any rights, claims, actions or causes of action whatsoever (whether in contract, tort or otherwise) arising out of or in any way relating to this Adherence Letter or our adherence to the Protocol Agreement or any actions contemplated as being required by ISDA.