Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . And so that will be rolled out in Q2 and Q3. Altimeter manages a long / short public equity fund and private growth equity funds. "Bloomberg Opinion" columnists offer their opinions on issues in the news. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Got a confidential news tip? I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. c/o Chairman Henry L. Meyer III 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. Capital October 20, 2022 Risk & Capital. 2023 CNBC LLC. United Continental Holdings, Inc. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. In fact, in the most recent quarter, they added 1.4 billion of contracted value. What is the connection between those three companies. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. It's been a big drawdown this year. 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. SPACs notched more than $70 billion so far in 2021, a new record. Consumer confidence is plummeting. 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%. Meta Exec Warns Charity and Worker Perks Can 'Create Drag' 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. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. Meta said the cost of the Quest 2 will drop $70 to $429.99, while the price of the higher-end Quest Pro will be slashed to $999.99 from $1,499.99. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and If the deal goes through, it. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. In the back half, you don't have those same comp issues that you have caused by COVID. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. 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. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. What is the metaverse and why are billions of dollars being spent on it? In a single quarter, they added 1.4 billion. Home : Altimeter And so we add on a fair amount of exposures we entered this year. If you have a two-to-three-year time horizon, there is no doubt there are a lot of stocks that are going to be up well over 100% off this bottom. Facebook's revenues in Q1 were lower than people expected. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Chief Executive Officer 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. Reels, which is a massive product is going to increase its monetization between now and the end of the year. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Why didn't you buy, you know, Uber at 28 bucks a share? Grab's SPAC Vehicle Altimeter Near Record Low After 28% Dive Is it close to being done? CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. Whatever the reason, that is certainly the perception. To put it in perspective, Roblox was a couple percent position for us, right, and Snowflake was a 30% position for us. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! Can it possibly be worth 100 billion? Altimeter Capital Management, LP Buys Opendoor Technologies Inc, Toast Inc, Duolingo Inc, Sells . 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 conventional wisdom press and investor is that the core business hit a wall last fall. 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. 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. So take Snowflake as an example. All quotes delayed a minimum of 15 minutes. The stock today hit a new low under $3. GERSTNER: No, I didn't leave it out. It's a better version of Zoom. Louis Bacon's: Moore Capital Management. We're withdrawing trillions off the Fed's balance sheet. 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.. So I think they got to match the investment to the revenue growth of the business. In short, Meta needs to get fit and focused. March 2013 Protocol ALID: 66704. Includes DocuBay and TimesPrime Membership. ALTIMETER CAPITAL MANAGEMENT, LP Top 13F Holdings - WhaleWisdom.com 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. Q1 2021: 13 Largest Global Startup Funding Rounds - AlleyWatch Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. But listen, there's massive uncertainty in the world. Think about this, Scott. 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. All rights reserved. Ranked #76 out of 483 Hedge Fund Managers. At least one big investor is calling for Mark Zuckerberg to throw in 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. The social media company had in June cut plans to hire engineers by at least 30%, with Zuckerberg warning employees to brace for an economic downturn. In preparation for its first-ever mass tournament, Chronos will feature a fantasy-theme RPG with the potential to earn prizes and a chance to win based on the classes of playable . But what is the right amount? Limit investment in metaverse / Reality Labs to no more than $5B per year. With all of this said, we truly believe that the company should be making some of these important investments. Contact. 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. Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. Your Reason has been Reported to the admin. If multiples expand then you have even more upside. FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. We did not see this talk of 10 rate hikes and we certainly didn't see a war developing in Europe. Chief Executive Officer I just happen to look at a Snowflake it's in front of me and because it's your largest position, I say can Snowflake really get back to its 52-week high of $405 a share. 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. 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. Altimeter Capital Management is an investment firm that operates within the technology sector. Brad Gerstner 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. It said Grab is expected to raise between. The bet . Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. We'll see you soon. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Oct 24 (Reuters) - Facebook-parent Meta Platforms Inc (META.O) needs to streamline by cutting jobs and capital expenditure, its shareholder Altimeter Capital Management said on Monday in an open letter to Chief Executive Mark Zuckerberg. Following is the unofficial transcript of a CNBC exclusive interview with Altimeter Capital Founder & CEO Brad Gerstner on CNBC's "Closing Bell: Overtime" (M-F, 4PM-5PM ET) today, Monday, March 14th for the premiere. PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. Meta reported in February that Reality Labs lost $13.72 billion in 2022. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . 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. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your 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. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. Altimeter is focused on technology investment, and has found multi-billion-dollar success. We were wrong. 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 Capital Management, - GuruFocus.com Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". 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%. 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 However, there are few signs that VR or some of the company's metaverse apps, such as Horizon Worlds, are catching on with the public beyond early adopters. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. Grab to list in US via $40 bln merger with Altimeter Growth The last 10 years have been a unique time in tech and for Meta. Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. Investopedia does not include all offers available in the marketplace. 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. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). These include white papers, government data, original reporting, and interviews with industry experts. Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. In Q1 of 2021, everybody was sitting on their couch. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: effective risk management for all users of derivative products. . Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. PLAN. What Does Metaverse Mean and How Does This Virtual World Work? CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. Altimeter Capital - Portfolio - Index Despite public skepticism at times warranted we have been supporters Hedge Fund Manager. Meta changed its company name from Facebook. I have been told that Amazon spent far less in total to build AWS. 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. 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. Chronos: Dawn of Time Launches First-ever Tournament 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. Bruce Berkowitz's: Fairholme Capital Management. 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. UPDATE: Altimeter Capital, PAR Capital Issue Letter to United They were buying goods, soccer balls on DICK's Sporting Goods and candles on Williams Sonoma. 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. We can just go through the list, Uber, Facebook, Roblox. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Some companies require tremendous capex investment to maintain their existing business. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. 233 South Wacker Drive The changes for the Quest 2 begin Sunday, March 5. Over the last three years, Meta has also dramatically increased its capital expenses. To read full story, subscribe to ET Prime, Billed annually at 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. It just launched in 150 countries, has over a billion views. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. The Meta investor recommends a plan to get the company's "mojo back.". 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. In an open letter to CEO Mark Zuckerberg on Monday, shareholder Altimeter Capital Management urged Meta Platforms Inc., the parent company of Facebook, to streamline by eliminating positions and capital expenditures. 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. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Sign up for free newsletters and get more CNBC delivered to your inbox. It takes effect in 2023. 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. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. browser. Altimeter Capital Management LP Top Holdings 13F Filings 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. JavaScript in your web browser. 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. And I think they have to execute against the underlying operations in the business. Steven Cohen's: Point72 Asset Management. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. Can it possibly be worth a trillion? c/o Altimeter Capital Management, LP. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Mar 11, 2021 3:07 PM EST. Is it done? The offers that appear in this table are from partnerships from which Investopedia receives compensation. Altimeter SPAC Has Reported $40 Billion Deal for Ride-Hail Company Grab How many dogs want to eat the dog food? Meta CTO Andrew Bosworth writes Facebook of old had focus in blog post Unlock your 30 days free access to ETPrime now. 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. Our best guess is that maintenance capex for Meta is less than $10B annually. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. 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). The conventional wisdom press and investor is that the core business hit a wall last fall. 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 . Brad Gerstner founded the. You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. Chris Conforti - Partner - Altimeter | LinkedIn I think we spent about an hour together. Altimeter Capital Management, LLC. We further understand that ISDA assigned a unique identification code or ALID to each adherence letter that was accepted for the August 2012 Protocol or the March 2013 Protocol and that, in order to amend a Protocol Covered Agreement pursuant to: (i) Appendix 1 to this Protocol (which is intended to top up agreements made pursuant to the August 2012 Protocol), we must provide our August 2012 Protocol ALID below; or (ii) Appendix 2 to the Protocol (which is intended to top up agreements made pursuant to the March 2013 Protocol), we must provide our March 2013 Protocol ALID below: It's 3 trillion, right? "In short, Meta needs to get fit and focused.". It has 24 billion in free cash they're going to generate this year. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. We worked hard on the deal and the timing was horrific. Altimeter Capital owns about 2.46 million Meta shares. Brad Gerstner, the CEO of Altimeter Capital and a Meta investor, wrote in an open letter to the company in October that Meta needs to "get fit and focused," and he was critical of the hefty. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. We believe the future lies in AI. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. 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, 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 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. 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. August 2012 Protocol ALID: 66703 With all of that said, we believe the company can responsibly and reasonably reign in capex while continuing to invest aggressively in AI and other critical areas. After the pandemic, hospitals are now on a strong footing. Chase Coleman's: Tiger Global Management. Will His AI Plans Be Any Different? They may never get back to the levels at which they traded before. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet.
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