[3] Sincerely, Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. But Meta needs to get its mojo back. 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. So if you want to bet on the future of growth, Southeast Asia is one of the places you want to bet this is one of the dominant brands, dominant internet platforms, and it's got 7 billion of cash on the balance sheet. Reels, which is a massive product is going to increase its monetization between now and the end of the year. Altimeter is based in California and has about $16 billion in . Mar 11, 2021 3:07 PM EST. 2-Year What do you think? CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad We're withdrawing trillions off the Fed's balance sheet. Right? A Division of NBCUniversal. You probably know you should capitalize proper nouns and the first word of every sentence. Meta didn't immediately respond to a request for comment. Privacy Policy, ISDA uses cookies to enhance your experience on our website. Hedge Fund - Altimeter Capital Management - Insider Monkey I said IDFA which is the Apple changes right? We dont have any demands. It's been a big drawdown this year. 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. Home : Altimeter We can just go through the list, Uber, Facebook, Roblox. But remember, Facebook's not just sitting there with his hands in the air saying oh my goodness, what can we do in a world where Apple wants to flex its monopolistic muscle and steal all of our advertisers. And then take that part of the world. Southeast Asian Superapp Grab Could Set SPAC Record Paul A. Reeder Altimeter Growth Corp. 2 raised $400 million in a January IPO. In the back half, you don't have those same comp issues that you have caused by COVID. David Einhorn's: Greenlight Capital. Ranked #76 out of 483 Hedge Fund Managers. b***@altimeter.com. As always, happy to connect with you and your team. Altimeter.com is Altimeter's only website. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . Chief Executive Officer You do, you do great work, excited for the new show and let's stay after it. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 2499 1749, Monthly They are people with families and kids to support. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. 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 Revenue. 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, 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. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. A Division of NBCUniversal. 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. That stuff was being advertised on Instagram. These are not numbers on a spreadsheet. 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. 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 . But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. And I appreciate you being with me on the very first "Overtime" show. In our view given United's valuable and industry-leading strategic asset base this long-term underperformance directly results from an underqualified, ineffective, complacent, and entrenched Board. With all of this said, we truly believe that the company should be making some of these important investments. Investopedia requires writers to use primary sources to support their work. Conclusion A Leaner, Faster, More Successful Meta. Altimeter Capital Portfolio Investments, Altimeter Capital Funds Altimeter SPAC Taking Grab Public | PYMNTS.com After the pandemic, hospitals are now on a strong footing. We have $130 oil and $6 gas at the pump. GERSTNER: Without a doubt the single biggest lever on growth multiples is rates. In the letter, Gerstner said Altimeter Capital doesn't have demands and simply wants to engage with Meta management. A newly launched P2E adventure game, Chronos: Dawn of Tie, has introduced a series of brand-new PvP elimination tournaments.Last month, the whimsical battle game organized its beta stage featuring selected players. There is no doubt that doubling annual FCF will improve share price. BRAD GERSTNER: Hey, Scott, thanks for having me. Market Research. We certainly are neither short-term traders nor activists. 15 We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. 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. Chase Coleman's: Tiger Global Management. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. Can they maintain their growth momentum? 9/29/2022 1:05 AM. It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. The changes for the Quest 2 begin Sunday, March 5. It makes no sense to me, but that is the risk that you run. 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. Q1 2021: 13 Largest Global Startup Funding Rounds - AlleyWatch 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 was founded in 2008 and is headquartered out of Boston, Massachusetts. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. 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. 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. This is a company that only did 1.2 billion in revenue last year. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. The answer to that is because people are very fearful. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Right. Rates are going up and we have a war. With SNOW currently trading at $242, that stake is now worth $8.8 billion. Before we we move, what do I do with Facebook? 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. I'll acknowledge that Roblox and other names like that are in a much smaller, are in a much more perilous position in this market because they're not generating as much free cash as some of these other companies that I already mentioned. Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. 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. So these are different order of magnitude bets. Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. 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. These include white papers, government data, original reporting, and interviews with industry experts. 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. Drew Angerer | Getty Images News | Getty Images, Meta needs to focus on its core business, not the Metaverse, says Sand Hill's Brenda Vingiello. Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo 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. 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,. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. Where's your exposure today? Altimeter Capital's Brad Gerstner calls on Meta to slash headcount This is a hard game. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. We believe in this team. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. browser. See here for a complete list of exchanges and delays. WAPNER: I wanna, I want to take a break and get into some of those names of all four but before I do that lastly, you mentioned very interestingly that you've taken your bond short off. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. 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. 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 . FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. Meta and other large companies have made it very difficult for start-ups to hire. As always, happy to connect with you and your team. will trigger a new window or tab to open. Altimeter Growth Corp. raised $450 million in an October 2020 IPO. We've destroyed over $15 trillion of stock market wealth. 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. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. 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. How many dogs want to eat the dog food? And I've let the company know that, right? It was being purchased on the Shopify platform and people were using PayPal to check out. See the Top Performing Hedge-Funds > Brad Gerstner . 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. To put it in perspective, Roblox was a couple percent position for us, right, and Snowflake was a 30% position for us. [2] The firm focuses on technology investments in both public and private markets globally. We do not take job reductions lightly. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. Learn the pros and cons of crowdfunding. The Meta investor recommends a plan to get the company's "mojo back.". How many increases? 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. 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. CAPEX Investing Aggressively and Responsibly in the Future of AI. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. We do not take job reductions lightly. Unlock your 30 days free access to ETPrime now. And Meta certainly has abundant financial resources to invest and / or return to shareholders. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. 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. Our six nominees have the necessary skills, leadership abilities, and relevant experience to catalyze a United course change and to help the Company realize its immense potential. But I do believe that this company like the others that we talked about is going to be worth more in the future supported by real free cash flow. 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. click here! 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. Altimeter Capital Management LP now owns 2,850,000 shares of the Internet company based in Singapore's stock worth $131,784,000 after purchasing an additional 1,600,000 shares during the last quarter. With the gains posted on March 3, Meta Platforms shares are up 54% this year. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. We were wrong. Do they want to stand with me and ride that out? Got a confidential news tip? 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. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. Meta stock is down over 61% in 2022. If the deal goes through, it. "If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.". 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. Tech SPAC Altimeter Growth Corp. 2 prices further upsized $400 million And so that will be rolled out in Q2 and Q3. Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. 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. What's going to be the inflation print in April? We have no stimulus checks. "In short, Meta needs to get fit and focused.". Brad Gerstner - Founder & CEO @ Altimeter Capital - Crunchbase About Altimeter Capital Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Altimeter Capital Company Profile | Management and Employees List 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. Every company I talked to is tightening its belts. ISDA is a registered trademark of the International Swaps and Derivatives Association, Inc. At the end of the second. 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. TEORIA ECONOMICA Y SOCIOPOLITICA DESCRIPTORES MNIMOS.pdf United Continental Holdings, Inc. Altimeter SPACs surge on reported $40 billion deal for Singapore ride effective risk management for all users of derivative products. 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 same time that Meta ramped up spend, you lost the confidence of investors. 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. PLAN, Access the exclusive Economic Times stories, Editorial and Expert opinion, 90 Days Prime access worth Rs999 unlocked for you, Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors, Stock analysis. This compensation may impact how and where listings appear. Is it done? This is a region of 700 million plus people. When you look at these questions, it comes down to this. Grab Reportedly Set to List in US Via SPAC Merger at $35 Billion Valuation And so for us, it's about simplification, reduction of gross and making sure that you consolidate that what you own into your highest conviction ideas whether you're playing at home in your 401k or whether you're doing this professionally. 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. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. Accept. 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. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). Meta layoffs 2022: Cut workforce, spending on metaverse, key investor Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. If you look at the company, it's now trading at $5 billion enterprise value. Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Stock Traders Are Ignoring Blaring Bond Alarms, iPhone Maker Plans $700 Million India Plant in Shift From China, Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War. Capitalization Rules-A Quick Guide | Grammarly And so we add on a fair amount of exposures we entered this year. To read full story, subscribe to ET Prime, Billed annually at 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. Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . He also asked Zuckerberg to cut down on capex and employee expenses. Brad Gerstner It said Grab is expected to raise between. It's interesting that now today you say we're in the neighborhood of a tradable bottom. GERSTNER: Well, first let's talk about what took Facebook down, right? 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. +Includes DocuBay and TimesPrime Membership. When you were with me in December, you said that you had picked some more of that up along with Snowflake. But listen, there's massive uncertainty in the world. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and With all of this said, we truly believe that the company should be making some of these important investments. In short, Meta needs to get fit and focused. 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. Consumer confidence is plummeting. Board of Directors AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. I imagine they're going to be super aggressive about how they're buying back shares. 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. ", Jitesh Ubrani of market research firm IDCpointed outthat Meta's year-over-year VR shipments plunged 93% in the fourth quarter, while those of Pico from rival ByteDance rose 110%. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. 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. That's what makes markets. As between each other Adhering Party and us, the amendments in the Appendices to the Protocol shall apply to each Protocol Covered Agreement to which we are a party in accordance with the terms of the Protocol and this Adherence Letter. Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . 2023 International Swaps and Derivatives Association, Inc. 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.