With the gains posted on March 3, Meta Platforms shares are up 54% this year. "An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards," Gerstner wrote. 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. And so we're getting hurt like everybody else. 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. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. ISDA fosters safe and efficient derivatives markets to facilitate Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Is it done? It did not specify which of Alitmeter's SPACs Grab was in talks with. 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. You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. 16,839 Followers. Nov. 16, 2021 at 2:38 p.m. At the end of the second. We certainly our base case, as you know, was a soft landing four to five rate hikes into this year. 9/29/2022 1:05 AM. Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. 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. Choose your reason below and click on the Report button. 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 . 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These include white papers, government data, original reporting, and interviews with industry experts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. And so, for our LPs, the bet is simple. Comprender el funcionamiento social, poltico, econmico, cultural y natural de la sociedad a fin de reflexionar, hacer propuestas y asumir compromiso en torno a las polticas de desarrollo nacional, local y regional en el mbito del respeto de los derechos humanos, la integracin econmica y la convivencia social, bajo una concepcin de desarrollo humano sostenible. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. Congrats on the new show. 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. To accomplish this goal, we recommend a three step plan that will double FCF to $40 B per year and focus the companys teams and investments: Getting Fit Headcount Reduction / Expense Control. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. With that said, we have a shortage of talent in Silicon Valley. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. Founder & Chief Executive Officer at Altimeter Capital . We'll see you soon. 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? Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. That stuff was being advertised on Instagram. We were wrong. We believe in this team. Ro $500.0M. I think the only debate is what is the multiple going to be in three months, in six months, in nine months. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? In short, Meta needs to get fit and focused. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 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. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. 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. WAPNER: I hear you. It takes effect in 2023. If Meta was able to control those costs, he said, then it could double its free cash flow and improve its share price. 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. The lagging stock price under this Board's control and supervision directly reflects substantial underperformance in terms of operational reliability, customer satisfaction, market share, profitability, and return on invested capital. 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. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. So take Snowflake as an example. Drew Angerer | Getty Images News | Getty Images, Meta needs to focus on its core business, not the Metaverse, says Sand Hill's Brenda Vingiello. 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. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. Today, the cost of capital has radically changed, and so has Metas growth rate. 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.. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Chief Executive Officer This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. At first glance, the rules of English capitalization seem simple. 15 Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. Some companies require tremendous capex investment to maintain their existing business. I said IDFA which is the Apple changes right? To put that in perspective, it merely takes the company back to mid-2021 levels of employee expense and I dont think anybody would argue that Meta wasnt sufficiently staffed in 2021 to tackle a business that looks similar to how it looks today. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. 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. Limit investment in metaverse / Reality Labs to no more than $5B per year. What do you think? I have been told that Amazon spent far less in total to build AWS. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . Popular Searches. 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. So we're in the neighborhood of a tradable bottom. Altimeter Capital is in talks with ride-hailing company Grab to bring the company public in a $40 billion deal, according to a report from The Wall Street Journal. We understand that the Protocol is designed to amend only those Protocol Covered Agreements between two Adhering Parties that were previously amended pursuant to the terms of the August 2012 Protocol, the March 2013 Protocol or both. Industry Trends on 4000+ Stocks, Pro Investing by Aditya Birla Sun Life Mutual Fund, Canara Robeco Equity Hybrid Fund Direct-Growth, Cut workforce, spending on metaverse, key investor tells Mark Zuckerberg. Tesla recalls 3,470 Model Y vehicles over loose bolts, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D'Silva, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, Exclusive: Snapchat kicks few children off app in Britain, data given to regulator shows, Exclusive news, data and analytics for financial market professionals. Altimeter Capital Management LP Info Size ($ 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. The silver lining is that unlike many companies, this popular narrative obscures the truth. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Getting Fit Headcount Reduction / Expense Control. 2023 International Swaps and Derivatives Association, Inc. Subject: Meaningful Board Change Required Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. If you look at the company, it's now trading at $5 billion enterprise value. Your Reason has been Reported to the admin. It's going to do 20 billion in GMV. At the same time that Meta ramped up spend, you lost the confidence of investors. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. This is expected to facilitate trade as the West ratchets up sanctions on Russia. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Panel led by former SC judge to include NaBFID chair KV Kamath and Infys Nandan Nilekani. What is the metaverse and why are billions of dollars being spent on it? On Oct. 11, Meta announced a new high-end VR headset, the Quest Pro. 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 partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. We agree to pay a one-time fee of $500 to ISDA at or before the submission of this Adherence Letter. Skip to main content. 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. Privacy Policy, ISDA uses cookies to enhance your experience on our website. I mean, we're talking about billions of dollars in revenue but you left that out. The answer to that is because people are very fearful. The stock today hit a new low under $3. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. Warren Buffett's: Berkshire Hathaway. 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. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking United Continental Holdings, Inc. All rights reserved. We're withdrawing trillions off the Fed's balance sheet. ISDA fosters safe and efficient derivatives markets to facilitate The firm's private equity arm makes all-stage venture capital investments, primarily in the technology sector. 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. But I am confident these companies like Snowflake, like Uber, like Facebook are going to be worth more than they are today at significantly more if you look out two years. You can learn more about the standards we follow in producing accurate, unbiased content in our. Altimeter Capital Management is a hedge fund with 17 clients and discretionary assets under management (AUM) of $17,950,309,162 (Form ADV from 2022-05-27). Altimeter Capital Management LP. Right. 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