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But you also (sometimes) capitalize the first word of a quote. I'm not a seller. PLAN, Yearly Accept. It's going to do 20 billion in GMV. Read More . It just launched in 150 countries, has over a billion views. 233 South Wacker Drive Can it possibly be worth a trillion? Finally, Prudential PLC lifted its . It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. So we've taken up our exposure, we've consolidated behind our five or six best ideas, we don't run leverage and so the bet for our LPs, I'm the largest LP in the fund. What is the rate of increase? And I've let the company know that, right? Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. They're fearful about what's going to happen with rates. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. A Division of NBCUniversal. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. 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. 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: Reduce headcount expense by at least 20%;Reduce annual capex by at least $5 B from $30B to $25B; andLimit investment in metaverse / Reality Labs to no more than $5B per year. 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. 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. Brad Gerstner's Phone Number and Email Last Update. Altimeter Capital owns a stake of about $320 million, according to the Wall Street Journal, but that only equates with a 0.1% share of the company, according to Meta's latest filings with the. GERSTNER: No, I didn't leave it out. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. You know, I told people at the time that, you know, there's risk in making these investments, right, we're shareholders of this, we've lost capital. If the deal goes through, it. GERSTNER: Well, the first thing I would say is this, set aside SPAC. But the fact of the matter is the entire market has evaporated around these types of stocks. WAPNER: I know I know you're not happy about it. Days Trial As always, we welcome the opportunity to engage in further discussions focused on this shared objective. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. Activist investor Brad Gerstner, founder and CEO of tech-focused hedge fund Altimeter Capital, sent an open letter to CEO Mark Zuckerberg in October calling for a pullback in metaverse spending. And Meta certainly has abundant financial resources to invest and / or return to shareholders. I mean you have defended it at every turn from the issues that the company has had you you defended Mark Zuckerberg, you've defended Sheryl Sandberg and you you did it quite loudly on this program. Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. I have spent over 20 years investing behind some of the worlds great founders who are helping to invent the technologies that move the world forward. Altimeter Capital Management LP Info Size ($ in 1000's) At 12/31/2022: $3,652,571 At 09/30/2022: $4,676,285 Altimeter Capital Management LP holdings changes, total fund size, and other information presented on HoldingsChannel.com was derived from Altimeter Capital Management LP 13F filings. There is no doubt that doubling annual FCF will improve share price. Right? c/o Altimeter Capital Management, LP. You got a lot of this right but multiples have come down a heck of a lot to this point. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. It was being purchased on the Shopify platform and people were using PayPal to check out. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. Is it done? I imagine they're going to be super aggressive about how they're buying back shares. GERSTNER: Well, first let's talk about what took Facebook down, right? Remember last year they gave a guide at the beginning of the year they're going to grow at 80%. Right? How big is that market? On Oct. 11, Meta announced a new high-end VR headset, the Quest Pro. Mar 11, 2021 3:07 PM EST. 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. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. And I appreciate you being with me on the very first "Overtime" show. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Instead, the company has announced investments of $1015B per year into a metaverse project that largely includes AR / VR / immersive 3D / Horizon World and that it may take 10 years to yield results. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. The comp against IDFA was very difficult in Q1 and will again be difficult in q2. We can just go through the list, Uber, Facebook, Roblox. I have been told that Amazon spent far less in total to build AWS. Altimeter Capital is in talks with ride-hailing company Grab to bring the company public in a $40 billion deal, according to a report from The Wall Street Journal. For reprint rights: Continue reading with one of these options: Login to get access to some exclusive stories, Get access to exclusive stories, expert opinions &, Valid only with UPI, Credit & Debit Cards Autopay, Inciting hatred against a certain community, 15 If multiples expand then you have even more upside. And then take that part of the world. Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . 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. The deal values the combined company at $35 billion and will. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. That's the asymmetry. In fact, in the most recent quarter, they added 1.4 billion of contracted value. GERSTNER: Scott, I love that you asked the question. 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. You know how to time markets. Altimeter Growth Corp. 2 raised $400 million in a January IPO. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. BRAD GERSTNER: Hey, Scott, thanks for having me. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. But what is the right amount? Is it all about rates at this point, especially when you're talking about the kinds of vulnerable stocks that we've really had front and center, those being tech? So first, you need to understand why did we see a deceleration of revenue because that informs why we're going to see a reacceleration in the back half of this year. 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. Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. 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%. 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 . 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. Link to 13F filings: SEC filings We believe in this team. 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. They just announced that they're going to be profit, full company profitable by 2023. All Rights Reserved. And so we add on a fair amount of exposures we entered this year. 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. So the way companies have to get there is by growing their top line and growing their bottom line, the answer as to all companies many most certainly will not. Dont miss out on ET Prime stories! Over the last three years, Meta has also dramatically increased its capital expenses. 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. It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people. Ro $500.0M. Learn the pros and cons of crowdfunding. b***@altimeter.com. David Einhorn's: Greenlight Capital. It's 3 trillion, right? Meta and other large companies have made it very difficult for start-ups to hire. I think if you said why might these numbers have to come down if we're heading into a recession, the numbers are likely to come down. Look at another one that I know is in your book or at least it was Roblox is down 74% from its 52-week high. And frankly, I don't think we're gonna have hyperinflation in a world where demand is being destroyed at the rate it's currently being destroyed. But remember, Facebook's not just sitting there with his hands in the air saying oh my goodness, what can we do in a world where Apple wants to flex its monopolistic muscle and steal all of our advertisers. If they just take the incremental cash they're going to generate this year and buy back shares that's 6% of the company Scott, let alone the 50 billion in cash they have sitting on the balance sheet. "In short, Meta needs to get fit and focused.". We want to hear from you. WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. effective risk management for all users of derivative products. Despite public skepticism at times warranted we have been supporters of the companys strategy to continuously reinvest in a product-led future and its mission to make the world more open and connected. Experience Your Economic Times Newspaper, The Digital Way! Our best guess is that maintenance capex for Meta is less than $10B annually. Paul A. Reeder Revenue. If the company were investing $12B per year into this project, then that confusion might not even be a problem. We've destroyed over $15 trillion of stock market wealth. Brad Gerstner is the Founder & Chief Executive Officer at Altimeter Capital based in Boston, Massachusetts. WAPNER: I wanna, I want to take a break and get into some of those names of all four but before I do that lastly, you mentioned very interestingly that you've taken your bond short off. Altimeter Capital Management is an investment firm that operates within the technology sector. Even excluding its large metaverse investment, Meta has gone from $15B in annual capex in 2018, 2019, and 2020 to $30B in annual capex in 2022. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. Southeast Asian superapp Grab is likely to set a world record by selling itself into a special purpose acquisition company, or SPAC, run by U.S. tech venture capital investors Altimeter Capital . 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. So I am very unhappy because I've lost money on the deal. Your Reason has been Reported to the admin. Skip to main content. Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Stock Traders Are Ignoring Blaring Bond Alarms, iPhone Maker Plans $700 Million India Plant in Shift From China, Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War. The definitions and provisions contained in the Protocol Agreement are incorporated into this Adherence Letter, which will supplement and form part of each Protocol Covered Agreement between us and each other Adhering Party. WAPNER: Man, I love how honest you are and I know our viewers do as well. Stock Radar: 19% from Budget Day! It's a better version of Zoom. All of China internet 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. 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. Altimeter is based in California and has about $16 billion in . And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. This heavy equipment maker is a good buy on dips stock; heres why, Tears from smokeless cooking gas as consumers continue to bear price hikes on top of subsidy cuts. And Meta certainly has abundant financial resources to invest and / or return to shareholders. Meta. 2023 CNBC LLC. The Meta investor recommends a plan to get the company's "mojo back.". With the gains posted on March 3, Meta Platforms shares are up 54% this year. And so, for our LPs, the bet is simple. Why 20%? They're building their own ad platform, right, that can deal with this. International Swaps and Derivatives Association. The answer to that is because people are very fearful. 9/29/2022 1:05 AM. 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. Altimeter is focused on technology investment, and has found multi-billion-dollar success. "In addition, people are confused by what the metaverse even means," Gerstner wrote. Altimeter LLC. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Ranked #76 out of 483 Hedge Fund Managers. I remember people asking that question about Amazon. Board of Directors These are not numbers on a spreadsheet. GERSTNER: Right Scott so that you know I started off by saying you know we've been beaten up this year like everybody else because I was covering shorts as we approach the five-year average. Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. You do, you do great work, excited for the new show and let's stay after it. The silver lining is that unlike many companies, this popular narrative obscures the truth. To read full story, subscribe to ET Prime, Billed annually at We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. 2550 Sand Hill Road, Suite 150. What is the connection between those three companies. It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people. The last 10 years have been a unique time in tech and for Meta. Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. By Altimeter Capital $750M Venture Capital in Feb, 2021 VROOM E-Commerce +2 Total funding $1.2B in 10 rounds from 15 investors By Altimeter Capital $50M Series E in Sep, 2016 Wingz Networking +3 Total funding $13.7M in 4 rounds from 36 investors By Altimeter Capital $11M Series B in Jan, 2016 Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. When you look at these questions, it comes down to this. How many dogs want to eat the dog food? After several years of growing tensions, the potential for a reset under Australia's new Labor government is in question as trade sanctions remain and diplomatic disputes persist. We have no more confidence that you will act responsibly in the future (even with yesterday's announcement) than we have evidence that you have done so in the past. Please refer to the section on cookies in our Website Privacy Policy 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. 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. 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,. The bet . 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. The stock is 51% off of its high. 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 is expected to facilitate trade as the West ratchets up sanctions on Russia. 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. I'll acknowledge that Roblox and other names like that are in a much smaller, are in a much more perilous position in this market because they're not generating as much free cash as some of these other companies that I already mentioned. Right? Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . As always, happy to connect with you and your team. I have been told that Amazon spent far less in total to build AWS. 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. "Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world," Gerstner wrote in the letter. Brad, thank you. So take Snowflake as an example. Rapid mobile adoption helped market leaders blaze through the s-curve with astounding growth rates and a historically low cost of capital made investments in people and things the rational economic decision. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. This is a company that only did 1.2 billion in revenue last year. 2023 Benzinga.com. The facts are startling. "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. NEW YORK, Nov. 16, 2021 (GLOBE NEWSWIRE) -- H1, which provides the largest global healthcare network that connects healthcare professionals, announced today that it has raised a $100M Series C. 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. We do not take job reductions lightly. 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. 16,839 Followers. If you look at the company, it's now trading at $5 billion enterprise value. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Welcome to "Overtime.". Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. Getting Fit Headcount Reduction / Expense Control. 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.
