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. 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. On top of that we had supply chain challenges. In fact, in the most recent quarter, they added 1.4 billion of contracted value. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. There is no doubt that doubling annual FCF will improve share price. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. I think we spent about an hour together. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . 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. 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. They may never get back to the levels at which they traded before. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. WAPNER: Okay, that's a that's a big a bold call. 3. Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. 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. The last 10 years have been a unique time in tech and for Meta. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. 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. Think about this, Scott. Brad Gerstner, Altimeter's chair who encouraged aggressive investment in artificial intelligence, said the firm wanted to engage with Meta and did not have any demands. c/o Chairman Henry L. Meyer III
articles a month for anyone to read, even non-subscribers! Chief Executive Officer
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.
Techmeme: Open letter: Altimeter Capital founder and CEO Brad Gerstner 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. It lost $5.8 billion in the first six months of the year. There is no doubt that doubling annual FCF will improve share price.
Altimeter Capital Management, LP - International Swaps and Derivatives Enjoy a 7-Day Free Trial Thru Feb 17, 2023! It's been a half century since Australia and China established formal relations, but neither side is really celebrating. March 8, 2016
Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. Popular Searches. The last 10 years have been a unique time in tech and for Meta. 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. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. So we're in the neighborhood of a tradable bottom.
Kevin Wang - Forbes Grab Reportedly Set to List in US Via SPAC Merger at $35 Billion Valuation Is it close to being done? 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 addition, people are confused by what the metaverse even means," Gerstner wrote. Meta and other large companies have made it very difficult for start-ups to hire. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. If you click the "Accept" button, you consent to the use of cookies on our website. We dont have any demands. We think both of those are solvable. We believe the future lies in AI. My bet is we're gonna have less this year. This is a hard game. In addition, people are confused by what the metaverse even means. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, More Iranian Schoolgirls Sickened in Suspected Poisoning Wave, No Major Offer Expected on Childcare in UK Budget, Oil Investors Get $128 Billion Handout as Doubts Grow About Fossil Fuels, Climate Change Is Launching a MutantSeed Space Race, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? So these are different order of magnitude bets. 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. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. We're down on the year. But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . Warren Buffett's: Berkshire Hathaway. 2023 CNBC LLC. . Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. I have been told that Amazon spent far less in total to build AWS. It makes no sense to me, but that is the risk that you run. Getting Fit Headcount Reduction / Expense Control. 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. Meta. 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. We'll see you soon. Meta stock is down over 61% in 2022. He joins me live. You do, you do great work, excited for the new show and let's stay after it. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Altimeter.com is Altimeter's only website.
Sea Limited (NYSE:SE) Shares Bought by Capital International Ltd. CA The Meta investor recommends a plan to get the company's "mojo back.". We do not take job reductions lightly. "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". 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. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. Brad Gerstner is the Founder & Chief Executive Officer at Altimeter Capital based in Boston, Massachusetts. What is the Fed going to do? 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. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. 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. Contact. 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. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Can it possibly be worth 100 billion? We believe in this team. 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.
With that said, we have a shortage of talent in Silicon Valley. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. In a single quarter, they added 1.4 billion. Meta said the cost of the Quest 2 will drop $70 to $429.99, while the price of the higher-end Quest Pro will be slashed to $999.99 from $1,499.99. Altimeter Capital Management, ISDA 2021 SBS Top-Up Protocol - Adherence. 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.
Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo 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. And what is going to be the resolution to the situation in the Ukraine? Conforti plans to join a new firm as a co-founder with former Whale Rock Capital Management partner Kristov Paulus, said one of the people, who asked not to be identified because the information is private. See the Top Performing Hedge-Funds > Brad Gerstner . Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. 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. Meta didn't immediately respond to a request for comment. 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. Altimeter Capital. By Altimeter Capital $750M Venture Capital in Feb, 2021 VROOM E-Commerce +2 Total funding $1.2B in 10 rounds from 15 investors By Altimeter Capital $50M Series E in Sep, 2016 Wingz Networking +3 Total funding $13.7M in 4 rounds from 36 investors By Altimeter Capital $11M Series B in Jan, 2016 And I think they have to execute against the underlying operations in the business. Our best guess is that maintenance capex for Meta is less than $10B annually. It can do great this, the business can be incredible. Now they've told us that they're going to achieve 15% free cash flow margins this year, five years early, right, while still growing 100%. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. 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 . Limit investment in metaverse / Reality Labs to no more than $5B per year. Gordon Bethune, former CEO of Continental Airlines; board member of Honeywell, Prudential Financial, and Sprint;
It was being purchased on the Shopify platform and people were using PayPal to check out. What is the rate of increase? Brad Gerstner, the CEO of Altimeter Capital and a Meta investor, wrote in an open letter to the company in October that Meta needs to "get fit and focused," and he was critical of the hefty. 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. 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. Board of Directors
This will alert our moderators to take action. PLAN. It's a better version of Messenger. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. 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. We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. 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. 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. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. In the letter, Gerstner said Altimeter Capital doesn't have demands and simply wants to engage with Meta management. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID.
Altimeter Capital's Brad Gerstner calls on Meta to slash headcount We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition.
H1 Raises $100M Series C to Expand Footprint, Make H1 the Today, the cost of capital has radically changed, and so has Metas growth rate. It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. Dear Chairman Meyer and Board Members:
CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad Meta investor Altimeter Capital urges Mark Zuckerberg to slash jobs I mean, two years ago we were we were having this conversation. SPACs notched more than $70 billion so far in 2021, a new record. 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. 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. I imagine they're going to be super aggressive about how they're buying back shares. Chicago, IL 60606
Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. Consumer confidence is plummeting. 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 . ", Twitter. 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). Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. Two years from now, people are going to be looking back and say, why the hell didn't you buy Snowflake at 160 bucks a share? The conventional wisdom press and investor is that the core business hit a wall last fall. 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. This compensation may impact how and where listings appear. 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.
Altimeter SPAC Has Reported $40 Billion Deal for Ride-Hail Company Grab Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that:
So listen, I'm not happy about it. Capital October 20, 2022 Risk & Capital. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital.