Investors Who Put $2 Billion Into FTX Face Scrutiny, Too 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. WAPNER: Man, I love how honest you are and I know our viewers do as well. With the gains posted on March 3, Meta Platforms shares are up 54% this year. 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. 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. Before we we move, what do I do with Facebook? He left GC and became co-CEO of NLG, an early online travel start-up purchased in part by IAC.He co-founded Openlist.com, a local search start up that was self-funded and sold to Marchex (Nasdaq: MCHX);He was a partner at PAR Capital, a multi-billion hedge. GERSTNER: Scott, thanks for having me. 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. It was being purchased on the Shopify platform and people were using PayPal to check out. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. Brad Gerstner In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. 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. A Division of NBCUniversal. I have spent over 20 years investing behind some of the worlds great founders who are helping to invent the technologies that move the world forward. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. That's the asymmetry. These are not numbers on a spreadsheet. In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. But listen, there's massive uncertainty in the world. Email. Why 20%? H1 Raises $100M Series C to Expand Footprint, Make H1 the I don't think they can. Altimeter Capital's Brad Gerstner calls on Meta to slash headcount It can do that by making. They were buying goods, soccer balls on DICK's Sporting Goods and candles on Williams Sonoma. 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. Why 20%? Brad Gerstner Wiki: Facts about the CEO OF Altimeter Capital Those three companies are all down that amount because it turns out that this year people got off their couch, they went out and they went to restaurants and they went in and did things instead of buy things. Kevin Wang - Forbes Samooha launches with tech that lets companies securely share data Experience Your Economic Times Newspaper, The Digital Way! ", 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%. Our contact information, solely for purposes of this Adherence Letter (and unrelated to the Questionnaire delivery options in the subsequent section) is: We consent to the publication of a conformed copy of this letter by ISDA and to the disclosure by ISDA of the contents of this letter. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. 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. Altimeter Capital owns approximately 0.11% of Meta. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! To read full story, subscribe to ET Prime, Billed annually at Altimeter.com is Altimeter's only website. Steven Cohen's: Point72 Asset Management. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. 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. If you really think about what the metaverse is in the first instance, it's a better version of what you and I are doing right here. Meta. We do not take job reductions lightly. 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. WAPNER: Speaking of going higher up, you see what interest rates are doing today after sitting in a tight spot, they've started to move to 11. Altimeter's nominees are: Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (META) and This will alert our moderators to take action. Consumer confidence is plummeting. 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. 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. $6.9 M. 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. 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. Musk Made a Mess at Twitter. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. Please refer to the section on cookies in our Website Privacy Policy How big is that market? Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more! I think we spent about an hour together. GERSTNER: Well, the first thing I would say is this, set aside SPAC. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. How many dogs want to eat the dog food? There is no doubt that doubling annual FCF will improve share price. Is it done? Altimeter Capital owns about 2.46 million Meta shares. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking Altimeter Capital Portfolio Investments, Altimeter Capital Funds It's our largest position in the book. 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. Get your daily dose of business updates on WhatsApp. click here! But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. Q1 2021: 13 Largest Global Startup Funding Rounds - AlleyWatch Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Meta Shareholder Asks Firm to Cut Jobs, Spending in Open Letter to CEO The changes for the Quest 2 begin Sunday, March 5. Where's your exposure today? Got a confidential news tip? Right. Chris Conforti - Partner - Altimeter | LinkedIn The silver lining is that unlike many companies, this popular narrative obscures the truth. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). Unlock your 30 days free access to ETPrime now. TEORIA ECONOMICA Y SOCIOPOLITICA DESCRIPTORES MNIMOS.pdf Meta Slashes Prices for VR Headsets 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). It just launched in 150 countries, has over a billion views. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. See here for a complete list of exchanges and delays. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. Can it possibly be worth 200 billion? ISDA fosters safe and efficient derivatives markets to facilitate 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 Management, LP - International Swaps and Derivatives Roblox Raises $520M led by Altimeter Capital and Dragoneer Investment Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). The bet . 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. Or it's well over a trillion, Microsoft 3 trillion. FREE Breaking News Alerts from StreetInsider.com! If you click the "Accept" button, you consent to the use of cookies on our website. The bottom line is where I wanted to start this whole interview with is you called it. Right? Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. We believe in this team. With all of this said, we truly believe that the company should be making some of these important investments. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. 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. 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. All of China internet down over 80%. 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). Investopedia does not include all offers available in the marketplace. I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. About Kevin Wang. 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. 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: Reduce headcount expense by at least 20%;Reduce annual capex by at least $5 B from $30B to $25B; andLimit investment in metaverse / Reality Labs to no more than $5B per year. The stock is 51% off of its high. 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. 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,. CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. When you were with me in December, you said that you had picked some more of that up along with Snowflake. 9/29/2022 1:05 AM. It's 3 trillion, right? I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. Got a confidential news tip? Bruce Berkowitz's: Fairholme Capital Management. Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo Dave Baszucki of Roblox describes the metaverse as the natural evolution of communication a multi-device world, including the phone, that is best thought of as a better version of text, video, and voice that will make us feel more connected. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. All rights reserved. WAPNER: I hear you. I said IDFA which is the Apple changes right? That stuff was being advertised on Instagram. "Bloomberg Opinion" columnists offer their opinions on issues in the news. David Einhorn's: Greenlight Capital. And so we add on a fair amount of exposures we entered this year. Meta shareholder wants Facebook parent to cut jobs, spending effective risk management for all users of derivative products. It's my job to ask you about it knowing you're not happy about it and you answered the question. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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. The definitions and provisions contained in the Protocol Agreement are incorporated into this Adherence Letter, which will supplement and form part of each Protocol Covered Agreement between us and each other Adhering Party. 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. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Meta investor Altimeter Capital urges Mark Zuckerberg to slash jobs We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. 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. And so that will be rolled out in Q2 and Q3. 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. Altimeter SPACs surge on reported $40 billion deal for Singapore ride WAPNER: I know I know you're not happy about it. I imagine they're going to be super aggressive about how they're buying back shares. Getting Fit Headcount Reduction / Expense Control. If the deal goes through, it. 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. 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. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. What is the rate of increase? I have been told that Amazon spent far less in total to build AWS. We have $130 oil and $6 gas at the pump. "Jitesh Ubrani: Tweet From March 3, 2023. 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. Learn the pros and cons of crowdfunding. Grab's SPAC Vehicle Altimeter Near Record Low After 28% Dive 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. WAPNER: I want to take a look at the stock in "Overtime" here because I think you're moving in I'm looking at what looks to be a higher move as we're having this conversation and that brings me frankly, now to Facebook. 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. We believe in this team. On top of that we had supply chain challenges. 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. In addition, people are confused by what the metaverse even means. . In fact, in the most recent quarter, they added 1.4 billion of contracted value. 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. 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. 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. And so we're getting hurt like everybody else. 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. The offers that appear in this table are from partnerships from which Investopedia receives compensation. 3. WAPNER: So let me talk about your overall exposure if I if I could because by last December, you had said you had taken most of your your shorts off and your long exposure was back up to 70%. Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance.
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