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. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. Is it done? I don't think there's any chance that the Fed is going to raise rates 10 times this year. 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). ISDA 2021 SBS Top-Up Protocol, Adhering Organization: With that said, we have a shortage of talent in Silicon Valley. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. It has 24 billion in free cash they're going to generate this year. Chronos: Dawn of Time Launches First-ever Tournament Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. WAPNER: I know I know you're not happy about it. 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. Can they maintain their growth momentum? 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. 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. The Meta investor recommends a plan to get the company's "mojo back.". 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. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. We dont have any demands. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Grab Reportedly Set to List in US Via SPAC Merger at $35 Billion Valuation Brad Gerstner's Altimeter Capital Management has between $300 million and $400 million in assets under management, and invests almost exclusively in the services sector. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. Altimeter Capital - Wikipedia ISDA is a registered trademark of the International Swaps and Derivatives Association, Inc. Brad Gerstner Wiki: Facts about the CEO OF Altimeter Capital GERSTNER: Right, it comes down fundamentally to a question Scott of whether you think we're gonna have more than eight rate increases or less. Your Reason has been Reported to the admin. Do they want to stand with me and ride that out? As I look at it, the market is now pricing in at least seven rate hikes. Contact. Link to 13F filings: SEC filings Data is a real-time snapshot *Data is delayed at least 15 minutes. Updated on September 30, 2022. Chris Conforti - Partner - Altimeter | LinkedIn The industry leader for online information for tax, accounting and finance professionals. On top of that we had supply chain challenges. So these are different order of magnitude bets. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . TEORIA ECONOMICA Y SOCIOPOLITICA DESCRIPTORES MNIMOS.pdf 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. Everybody knows we've been in this company for a long time. for a description of how we use cookies. I don't think the Fed is going to throw away two years' worth of work to try to avoid a recession in a election year and run us straight into the teeth of a recession while we're trying to fight a war in Europe. Learn the pros and cons of crowdfunding. GERSTNER: Well, first let's talk about what took Facebook down, right? Popular Searches. We're withdrawing trillions off the Fed's balance sheet. What Does Metaverse Mean and How Does This Virtual World Work? It's good to see you again. And Meta certainly has abundant financial resources to invest and / or return to shareholders. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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 . Meta. Louis Bacon's: Moore Capital Management. Grab's SPAC Vehicle Altimeter Near Record Low After 28% Dive Now that's what's going on in the business so all those people writing rest in peace epitaphs for Facebook are going to have to deal with that acceleration. Meta layoffs 2022: Cut workforce, spending on metaverse, key investor click here! 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. If they do it, I think the stock can be up over 50% between now and the end of the year. Every company I talked to is tightening its belts. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Altimeter Capital Company Profile | Management and Employees List Think about this, Scott. 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. 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%. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. 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. Some companies require tremendous capex investment to maintain their existing business. 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. He also asked Zuckerberg to cut down on capex and employee expenses. Right? 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. 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. PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. ISDA fosters safe and efficient derivatives markets to facilitate We're not in the business of being long or short bonds generally I'd put them on as a hedge against our growth exposure. It's a better version of Zoom. Meta and other large companies have made it very difficult for start-ups to hire. We can just go through the list, Uber, Facebook, Roblox. 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. With SNOW currently trading at $242, that stake is now worth $8.8 billion. 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. Data is a real-time snapshot *Data is delayed at least 15 minutes. Today, the cost of capital has radically changed, and so has Metas growth rate. 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. The conventional wisdom press and investor is that the core business hit a wall last fall. Grab Holdings Looking to Go Public Through SPAC Merger Remember last year they gave a guide at the beginning of the year they're going to grow at 80%. 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. All of China internet down over 80%. 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.. 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. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. And so that will be rolled out in Q2 and Q3. You can learn more about the standards we follow in producing accurate, unbiased content in our. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. In addition, people are confused by what the metaverse even means. Can it possibly be worth a trillion? 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. With all of this said, we truly believe that the company should be making some of these important investments. As you know, we are long-term shareholders. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. 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. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. 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. We're down on the year. JavaScript in your web browser. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? They're building their own ad platform, right, that can deal with this. 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. 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. We didn't see the concerns emerging about hyperinflation about 10 to 12 rate hikes, and we certainly didn't see this tragic more unfolding on the doorstep of Europe. Capital October 20, 2022 Risk & Capital. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Brad Gerstner's Phone Number and Email Last Update. 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. 10. Sincerely, The same is true for Microsoft, right? 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. The changes for the Quest 2 begin Sunday, March 5. Trading Book: Climate Risk Scenario Analysis Close Cart 0; Reveal page search bar; ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Ranked #76 out of 483 Hedge Fund Managers. 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. committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . [2] The firm focuses on technology investments in both public and private markets globally. 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. If multiples expand then you have even more upside. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. Accept. The answer to that is because people are very fearful. 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. They just announced that they're going to be profit, full company profitable by 2023. We worked hard on the deal and the timing was horrific. This is a company that only did 1.2 billion in revenue last year. We certainly are neither short-term traders nor activists. Stock Radar: 19% from Budget Day! About Altimeter Capital 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. ", Twitter. When you look at these questions, it comes down to this. When exactly did you determine that the Board was so inadequate as to need four new directors, all at once, and without an annual meeting or a stockholder vote? +Includes DocuBay and TimesPrime Membership. It can do great this, the business can be incredible. 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. Meta shareholder Altimeter urges Facebook parent to cut down jobs, expenses Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. 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. Meta. 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. So we're in the neighborhood of a tradable bottom. You probably know you should capitalize proper nouns and the first word of every sentence. Brad Gerstner 'Super-Sized and Terrifying': Zuckerberg's $100B Metaverse Gamble Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Altimeter Capital Management LP Info Size ($ 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. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. And what is going to be the resolution to the situation in the Ukraine? With that said, we have a shortage of talent in Silicon Valley. We certainly our base case, as you know, was a soft landing four to five rate hikes into this year. So I am very unhappy because I've lost money on the deal. And I think they have to execute against the underlying operations in the business. "Bloomberg Opinion" columnists offer their opinions on issues in the news. What am I supposed to think about that? Includes DocuBay and TimesPrime Membership. We do not take job reductions lightly. And so, for our LPs, the bet is simple. Altimeter Capital Fund Manager Profile | Preqin As always, we welcome the opportunity to engage in further discussions focused on this shared objective. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. It's been a big drawdown this year. 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. Altimeter Capital Management LP Top Holdings 13F Filings Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and 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. 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,. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. 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. . We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. 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. Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more! 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Or it's well over a trillion, Microsoft 3 trillion. We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. David Einhorn's: Greenlight Capital. Meta Slashes Prices for VR Headsets 2499 1749, Monthly Where's your exposure today? We are generally patient investors. 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. I think, or inflation, I think they're behind the curve on recession. Read More . 2023 CNBC LLC. 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. . In short, Meta needs to get fit and focused. US Jobs Report and Powell Testimony Take Center Stage: Eco Week, Bond Mavens Favor Curve Wagers for Next Encounter With Jobs Data, Bank of Canada Risks Falling Too Far Behind Fed, Scotia Says, Feds Daly Says More Rate Hikes Likely Needed to Cool Inflation, Colombia Prices Rise Less than Forecast to a Fresh 24-Year High, Shortage ofMetals for EVs Is Rising Up the Agenda in Automakers C-Suites, Italys CDP, Macquarie Said Set to Make Telecom Italia Grid Offer, In Blacklisting Inspur, US Targets Partner Used by Intel and IBM, Twitter Revenue, Earnings Fell About 40% in December, WSJ Says, China E-Commerce Giant JD Set for $1.4 Billion Discount Spree, Bolsonaro Says Mission Isnt Over as US Conservatives Fete Him, Biden Closes In on Order to Restrict US Investment in China Tech, Harrods Shrugs Off Recession Fears as Rich Get Richer, FT Says, Wealthy NYC Family Feuds Over $258 Million Madison Avenue Sale, Porsche, Ferrari E-Fuel Push at Heart of EU Engine Debate, Tom Sizemore, 'Saving Private Ryan' Actor, Dies at 61. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; In addition, people are confused by what the metaverse even means. Conforti plans to join a new firm as a co-founder with. The last 10 years have been a unique time in tech and for Meta. 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. Musk Made a Mess at Twitter. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. [3] We had given most of that up by middle of December. I don't think stocks today reflect a great price discovery about where these stocks are going to be in six months, let alone two years, but I'm also eyes wide open to the fact that we could go lower before we go higher. What is the Fed going to do? We dont have any demands. Brad Gerstner's Altimeter Capital has an $8B profit on Snowflake. A new Getting Fit Headcount Reduction / Expense Control. Get this delivered to your inbox, and more info about our products and services. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. And we've had government intervention of the magnitude. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and Experience Your Economic Times Newspaper, The Digital Way! ", Medium.com. But listen, there's massive uncertainty in the world. Capitalization Rules-A Quick Guide | Grammarly Its founder faces criminal and civil charges and goes to trial in October. I don't think they can. It did not specify which of Alitmeter's SPACs Grab was in talks with. CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad Gerstner Speaks with CNBC's Scott Wapner on "Closing Bell: Overtime" Today Published Mon, Mar 14 20225:56 PM EDT Share. Investors Who Put $2 Billion Into FTX Face Scrutiny, Too 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. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. 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. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. You got a lot of this right but multiples have come down a heck of a lot to this point. Grab to list in US via $40 bln merger with Altimeter Growth FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. Meta Shareholder Writes Critical Open Letter, Saying the Company Needs 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.
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