ISDA is a registered trademark of the International Swaps and Derivatives Association, Inc. 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. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. The firm's private equity arm makes all-stage venture capital investments, primarily in the technology sector. 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. effective risk management for all users of derivative products. 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. 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. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Despite public skepticism at times warranted we have been supporters 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. We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. I don't think Mark did a particularly good job of explaining the meta investments. Meta needs to regain the confidence of investors, the public and employees, Altimeter Capital Management CEO Brad Gerstner said Monday in an open letterto Zuckerberg. 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. Altimeter Capital Portfolio Investments, Altimeter Capital Funds Meta shareholder wants Facebook parent to cut jobs, spending Subject: Meaningful Board Change Required 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. Chris Conforti - Partner - Altimeter | LinkedIn [2] The firm focuses on technology investments in both public and private markets globally. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. 3. PLAN. And so, for our LPs, the bet is simple. Benzinga does not provide investment advice. "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. Why didn't you buy, you know, Uber at 28 bucks a share? . In addition, people are confused by what the metaverse even means. With all of this said, we truly believe that the company should be making some of these important investments. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. I have been told that Amazon spent far less in total to build AWS. Home : Altimeter We do not take job reductions lightly. Meta. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. We agree to pay a one-time fee of $500 to ISDA at or before the submission of this Adherence Letter. Our best guess is that maintenance capex for Meta is less than $10B annually. Investopedia does not include all offers available in the marketplace. Regrettably, our efforts have led to our complete loss of confidence in the current Board, and to our firm determination that meaningful, stockholder-directed Board change is urgently required to serve the long-term best interests of United's stockholders, customers, and employees. Altimeter's nominees are: Sign up for free newsletters and get more CNBC delivered to your inbox. About Altimeter Capital Altimeter is a leading technology focused investment firm based in Silicon Valley with over $15 billion in assets from endowments, foundations, and family offices. This is a hard game. Unlock your 30 days free access to ETPrime now. 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. He also asked Zuckerberg to cut down on capex and employee expenses. 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. Activist investor Brad Gerstner, founder and CEO of tech-focusedhedge fundAltimeter Capital, sent anopen letterto CEOMark Zuckerbergin October calling for a pullback in metaverse spending. As always, happy to connect with you and your team. ", Twitter. Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more! We believe the future lies in AI. 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. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". 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. It's been a big drawdown 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). 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. 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. We believe the future lies in AI. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (NASDAQ: META) and Mark Zuckerberg. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. If Meta was able to control those costs, he said, then it could double its free cash flow and improve its share price. 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. What do you think? Airline Industry Veteran Gordon Bethune Leads Stockholder-Nominated "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; And frankly, I was going to play some sound from you from our Delivering Alpha event last September where you called a lot of this but I don't even have to do that anymore because you just went through it. 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. But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. There is no doubt that doubling annual FCF will improve share price. 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. In Q1 of 2021, everybody was sitting on their couch. So take Snowflake as an example. click here! Usually you don't capitalize after a colon, but there are exceptions. 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. With SNOW currently trading at $242, that stake is now worth $8.8 billion. And now we've shot right through the five-year average. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. And so we add on a fair amount of exposures we entered this year. . Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: The stock today hit a new low under $3. Ram Parameswaran is the founder of Octahedron Capital, a global, growth-oriented investment firm that seeks to make concentrated investments in leading public and private companies that drive the world's internet economy. Chicago, IL 60606 Southeast Asian Superapp Grab Could Set SPAC Record AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Meta stock is down over 61% in 2022. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. Brad Gerstner's Phone Number and Email Last Update. And so we're getting hurt like everybody else. But I think if you have a time horizon over the course of the one to three years, we see a lot of stocks in our universe that we not only think are going to end the year higher, but we think are going to be multiples higher as we look out over the next two to three years. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. At the same time that Meta ramped up spend, you lost the confidence of investors. My bet is we're gonna have less this year. HONG KONG (AP) 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 . In fact, our internet stock index is at a 10-year low and software is back nearly where we were in 2016 before the rerating of software occurred. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. 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 . Round: Series D Description: Ro is a telehealth startup that operates digital health clinics for men's and women's health, along with smoking cessation. Meta Exec Warns Charity and Worker Perks Can 'Create Drag' 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." Techmeme: Open letter: Altimeter Capital founder and CEO Brad Gerstner The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . We are generally patient investors. 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. On Oct. 11, Meta announced a new high-end VR headset, the Quest Pro. Further strengthening our own conclusions, your seemingly desperate actions yesterday appear as a transparent and cynical attempt to maintain your official privileges and power, despite your long historical record of deficient oversight on behalf of stockholders. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. Is it close to being done? Experience Your Economic Times Newspaper, The Digital Way! Login 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. 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. David Einhorn's: Greenlight Capital. So were Shopify's and so were PayPal. 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. 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. 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. Get your daily dose of business updates on WhatsApp. Includes DocuBay and TimesPrime Membership. What's going to be the inflation print in April? In his open letter, Gerstner asked Meta to cap its expenditure on the metaverse to $5 billion a year from the current announced investment of $10-15 billion. 2499 1749, Monthly You know how to time markets. Ray Dalio's: Bridgewater Associates. International Swaps and Derivatives Association. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. Revenue. Reels, which is a massive product is going to increase its monetization between now and the end of the year. 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. They are people with families and kids to support. Tesla recalls 3,470 Model Y vehicles over loose bolts, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D'Silva, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, Exclusive: Snapchat kicks few children off app in Britain, data given to regulator shows, Exclusive news, data and analytics for financial market professionals. In short, Meta needs to get fit and focused. Sincerely, "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. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. 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 . 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. We understand that the Protocol is designed to amend only those Protocol Covered Agreements between two Adhering Parties that were previously amended pursuant to the terms of the August 2012 Protocol, the March 2013 Protocol or both. The full text of the stockholder letter to the United Board follows: March 8, 2016. With Snowflake, the question as to whether or not that business is going to compound, I think is not one that many people will debate. It was being purchased on the Shopify platform and people were using PayPal to check out. So these are different order of magnitude bets. United Stockholders Altimeter Capital and PAR Capital Express GERSTNER: Without a doubt the single biggest lever on growth multiples is rates. 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. 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. 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. Meta says India most significant country for all new things across its platforms, Meta to cut its headcount expenditure by 20%, Hindenburg-triggered Adani Stock Plunge: SC Names Panel to Review Investor Protection Norms, Insurers Eye Bigger Marine Pool for Russia Shipments, ETtech Explainer: Whats behind Sebis crackdown on YouTube influencers for stock market manipulation, A correction good for IT companies, staff: Nasscom chairperson, Infosys cofounder Narayana Murthy says VCs responsible for current growth culture in startups, Caution, conservative client outlook behind Capgeminis muted guidance: CEO Ashwin Yardi, Parliamentary standing committee has approved data protection bill: Ashwini Vaishnaw, Assembly Elections 2023 Results Highlights, India Post Payment Bank Post Office Savings Bank All India Single Ifsc Delhi Delhi IPOS0000DOP, Dragons Prying Eye In The Sky Why Balloon Gate Should Be On Top Of Indias List Of Worries, How Banks Ceded The Upi Space And Control To Phonepe And Google Pay, Macquaries Double Upgrade Has Sparked Some Interest In Paytm Stock Should You Buy, Amazons Aim To Rule Air Cargo Just Got Wings In India Why This Is Only The Start Of A Long Haul, Why A Minority Investor Wants To Stall The Long Pending Indiabulls Real Estate Embassy Group Merger, In 4 Stories Cognizants Tumultuous Journey, Future Locked In A Crypt Understanding The Crackdown On Crypto Amid A Hope For A Global Framework, 5 Weekend Must Reads Featuring India Taking On The Us In Automobile Reliability, The Worlds Most Important Box In 3 Stories, Silent Epidemic The Health Catastrophe India Is Not Talking About And Why That Should Change, Budget 2023 Tweaked The New Income Tax Slabs, Sensex Surges Over 200 Points Nifty50 Above 10350, Why Boycott Germany Is Trending Here Is All You Need To Know, New Zealand Earthquake Of Magnitude 6 1 Hits Northwest Of Wellington Amidst Cyclone Gabrielle, Now Reach Delhi To Jaipur Within 2 3 Hours Courtesy Delhi Mumbai Expressway, Chatgpt Vs Google Bard How Do These Two Ai Chatbots Stack Up Against Each Other, Air India Boeing Deal Us President Biden Speaks With Pm Modi After Landmark Agreement Of 220 Aircraft, Khalistani Separatist Amritpal Singh Gives Ultimatum To Punjab Govt Cancel Fir In An Hour Or Else, Russia Ukraine War Ukrainian Soldiers Call For More Western Weapons, Explained Us New Move On H1b And L1 Visas, Statestreet Hcl Services India Private Limited, Nclat Upheld Adani Power Bid For Korba West Power Asks Shapoorji Pallonji Co To Pursue Arbitration For Claims, Manish Sisodias Arrest Read How The Delhi Liquor Scam Unfolded, We Aspire To Become A 100 Billion Company By 2030 Deepinder Goyal, Dot Nod Soon For Vodafone Ideas Payment Plan, Rhyme Reason India Is Said To Be A Bright Spot In The Global Economy For Nothing, Adani Stocks Market Cap Slips Below Rs 7 Lakh Crore Mark In Non Stop Selloff, Ipo Drought To End In March With Nine Companies Seeking To Raise Over Rs 17000 Crore, Adani Green Among 9 Companies To See Sharp Rise In Promoter Pledge Last 1 Year, Hiranandani Group Leases 21000 Sq Ft In Thane Township To Multiplex Chain Inox, Why Passive Vaping Can Be A Health Scare For The Smoker And Those Around Him, Us Cuts Visa Delays In India Vows To Do More, Adani To Supply Power To Bangladesh In Reduced Price Report, Pinebridge Looks Past Adani Saga To Load Up On Stocks In India, Drone Wars Cartelisation Complaints Reach Defence Ministry On Armys Bulk Uav Purchase Plans, Indigo Offers Flight Tickets From Rs 2093 2023 For Travel Between March To October.