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. . I would take it a step further and argue that these incredible companies would run even better and more efficiently without the layers and lethargy that comes with this extreme rate of employee expansion. We agree to pay a one-time fee of $500 to ISDA at or before the submission of this Adherence Letter. Reels, which is a massive product is going to increase its monetization between now and the end of the year. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. We are generally patient investors. 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. Altimeter Capital Management, LLC. 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. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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. The stock today hit a new low under $3. Congrats on the new show. Samooha launches with tech that lets companies securely share data Our best guess is that maintenance capex for Meta is less than $10B annually. 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. Altimeter Capital's Brad Gerstner calls on Meta to slash headcount Meta shareholder Altimeter urges Facebook parent to cut down jobs, expenses "In addition, people are confused by what the metaverse even means," Gerstner wrote. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. browser. And so, for our LPs, the bet is simple. Altimeter Capital Management is an investment firm that operates within the technology sector. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? FTX founder Sam Bankman-Fried was not only a tireless fundraiser from venture capital firms including Paradigm and Sequoia Capital, but also quietly made investments in those same funds, according to two people familiar with the matter. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. It's been a big drawdown this year. In fact, in the most recent quarter, they added 1.4 billion of contracted value. No matter how a company came public in 2021, let alone December of 2021, right, they've been obliterated. GERSTNER: So let's talk for a second about what I called. The Meta investor recommends a plan to get the company's "mojo back.". What Does Metaverse Mean and How Does This Virtual World Work? Some companies require tremendous capex investment to maintain their existing business. Altimeter.com is Altimeter's only website. There is no doubt that doubling annual FCF will improve share price. We don't think we're going to have 10 rate hikes and we do think there'll be an off ramp to the situation in Ukraine. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! We want to hear from you. They may never get back to the levels at which they traded before. Altimeter LLC. 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. These are not numbers on a spreadsheet. 3. Days Trial. 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. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. So you know, when I look at what's going on in the business and I try to distill it from the noise, which is what has made us good for 20 years, not following the crowd, not panicking, but really looking at the business. 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. The industry leader for online information for tax, accounting and finance professionals. And I think they have to execute against the underlying operations in the business. 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. 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%. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. He also asked Zuckerberg to cut down on capex and employee expenses. So take Snowflake as an example. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Meta stock is down over 61% in 2022. "In short, Meta needs to get fit and focused.". Will His AI Plans Be Any Different? There are a lot of companies with speculative business models, right, that are should have never been valued where they were valued and if you don't have absolute conviction, right, they can grow their product, grow their top line and grow their earnings to match where those earlier prices were, then you need to rotate those dollars out of those companies and into companies where you have that level of conviction. I mean, two years ago we were we were having this conversation. With all of this said, we truly believe that the company should be making some of these important investments. The facts are startling. In Q1 of 2021, everybody was sitting on their couch. Benzinga does not provide investment advice. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. ", Medium.com. Investors in the round: 776 Capital, Altimeter Capital, BoxGroup, Dragoneer Investment Group, FirstMark, General Catalyst, Radcliff Group, ShawSpring Partners, SignalFire, The Baupost Group, Torch Capital, TQ Ventures Sea Limited (NYSE:SE) Shares Bought by Capital International Ltd. CA It can compound its earnings and this that and the other but I need to know can it get back to that level. So listen, I'm not happy about it. 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. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. 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. 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 . 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? The comp against IDFA was very difficult in Q1 and will again be difficult in q2. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. But you also (sometimes) capitalize the first word of a quote. 233 South Wacker Drive Altimeter Capital Management, LLC - Brad Gerstner - TipRanks 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. 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. articles a month for anyone to read, even non-subscribers! Altimeter Growth Corp. raised $450 million in an October 2020 IPO. Altimeter Capital Management, ISDA 2021 SBS Top-Up Protocol - Adherence. Our Standards: The Thomson Reuters Trust Principles. And now we've shot right through the five-year average. 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. 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 do not take job reductions lightly. All rights reserved. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. Unlock your 30 days free access to ETPrime now. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! You got a lot of this right but multiples have come down a heck of a lot to this point. effective risk management for all users of derivative products. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. UPDATE: Altimeter Capital, PAR Capital Issue Letter to United Continental Board - United Airlines Holdings (NASDAQ:UAL) - Benzinga SPY 397.68 0.74% QQQ 293.61 0.83% BTC/USD 22299.46 5.109%. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. United has a Clear Record of Sustained and Substantial Underperformance: Despite premier, industry-leading strategic assets such as significant scale advantages, strong brand recognition, hubs in key business markets, and membership in the largest global airline alliance United has been the worst-performing U.S. airline stock over the last five years. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; 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. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. WAPNER: I know I know you're not happy about it. So we're in the neighborhood of a tradable bottom. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. We certainly are neither short-term traders nor activists. Kevin Wang - Forbes 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. Choose your reason below and click on the Report button. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. 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." Can it possibly be worth 100 billion? Meta and other large companies have made it very difficult for start-ups to hire. The offers that appear in this table are from partnerships from which Investopedia receives compensation. The same is true for Microsoft, right? So I think they got to match the investment to the revenue growth of the business. Facebook's revenues in Q1 were lower than people expected. Roblox Raises $520M led by Altimeter Capital and Dragoneer Investment Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. Whatever the reason, that is certainly the perception. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . 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. Chief Executive Officer 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. Altimeter Capital. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . Altimeter. Digital Markets Act (DMA): How the EU Law Will Work, Mark Zuckerberg: Founder and CEO of Meta (formerly Facebook), Crowdfunding: What It Is, How It Works, Popular Websites, FTX: An Overview of the Exchange and Its Collapse, New Prices for Meta Quest 2s 256GB SKU + Meta Quest Pro, Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors), Meta Reports Fourth Quarter and Full Year 2022 Results. It's down 32% in the last 11 months ,that ranks it in the top three of the last 20 years in terms of drawdowns. 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 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. Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo And so that will be rolled out in Q2 and Q3. It can do great this, the business can be incredible. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and 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. You probably know you should capitalize proper nouns and the first word of every sentence. 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. And Meta certainly has abundant financial resources to invest and / or return to shareholders. They're fearful about what's going to happen with rates. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. Get this delivered to your inbox, and more info about our products and services. ISDA fosters safe and efficient derivatives markets to facilitate Get this delivered to your inbox, and more info about our products and services. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. Consumer confidence is plummeting. We had given most of that up by middle of December. 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. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Conforti plans to join a new firm as a co-founder with former Whale Rock Capital Management partner Kristov Paulus, said one of the people, who asked not to be identified because the information is private. I would take it a step further and argue that these incredible companies would run even better and more efficiently without the layers and lethargy that comes with this extreme rate of employee expansion. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. BRAD GERSTNER: Hey, Scott, thanks for having me. Altimeter Capital Management LP Info Size ($ 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. But Meta needs to get its mojo back. 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. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your As always, happy to connect with you and your team. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. The answer to that is because people are very fearful. I'm going to own these companies, there are a handful of select companies that are free cashflow positive that are going to be worth more in the future. GERSTNER: Well, the first thing I would say is this, set aside SPAC. Altimeter is based in California and has about $16 billion in . GERSTNER: Scott, thanks for having me. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. 2550 Sand Hill Road, Suite 150. Updated on September 30, 2022. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. Founder & Chief Executive Officer at Altimeter Capital . 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. Includes DocuBay and TimesPrime Membership. 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. So, it doesn't surprise me at all that buyers are on the sidelines and that sellers and short sellers are having a field day with stocks. If you look at the company, it's now trading at $5 billion enterprise value. But what is the right amount? 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. 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 just launched in 150 countries, has over a billion views. So we believe not only you're going to get dramatically accelerated earnings, right, we think they're going to be a little bit more cautious about how they're spending those meta investment dollars, how they're spending dollars across the business. Meta. It has 24 billion in free cash they're going to generate this year. 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. Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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