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. Everybody knows we've been in this company for a long time. committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . The answer to that is because people are very fearful. Conclusion A Leaner, Faster, More Successful Meta. Chief Executive Officer Right. How big are the margins, ultimately Snowflake will be worth a lot more because there is almost endless demand for the product and this is a business that is highly profitable. Sign up for free newsletters and get more CNBC delivered to your inbox. You can learn more about the standards we follow in producing accurate, unbiased content in our. 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. This is a leading internet company in Southeast Asia. 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. 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's a better version of Zoom. Dont miss out on ET Prime stories! Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. 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. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. I think if you said why might these numbers have to come down if we're heading into a recession, the numbers are likely to come down. 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. 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. They're building their own ad platform, right, that can deal with this. Brad Gerstner is the Founder & Chief Executive Officer at Altimeter Capital based in Boston, Massachusetts. 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. Is it close to being done? We were wrong. Nov. 16, 2021 at 2:38 p.m. They may never get back to the levels at which they traded before. 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. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. 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 annual investment in the metaverse to $5 billion instead of the current $10 billion. 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. I think that this is a business that is investing in the right things. All Rights Reserved. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. And I think they have to execute against the underlying operations in the business. Samooha, a startup developing a "cross-cloud" data collaboration platform, today announced that it raised $12.5 million in a funding tranche backed by Altimeter Capital and Snowflake Ventures . "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: Adani Group on Thursday said US-based boutique investment firm GQG Partners has picked up equity stakes worth $1.87 billion (15,446 crore) in four listed group companies Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission and flagship Adani Enterprises via secondary share sales. browser. 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. 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? You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking 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. Usually you don't capitalize after a colon, but there are exceptions. David Einhorn's: Greenlight Capital. No matter how a company came public in 2021, let alone December of 2021, right, they've been obliterated. 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,. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. PLAN. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. "If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.". So take Snowflake as an example. Sincerely, Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. ISDA fosters safe and efficient derivatives markets to facilitate As always, happy to connect with you and your team. 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. Right if the Fed raises rates 10 or 12 times given the demand destruction and the slowdown already underway in this country, we will be in a big recession come fall. Focusing the Metaverse: the Next Generation of Communication and Collaboration. But Meta needs to get its mojo back. 41,300 crore) to $25 billion (roughly Rs. 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. Accept. I said IDFA which is the Apple changes right? 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.. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. August 2012 Protocol ALID: 66703 After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 9/29/2022 1:05 AM. 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. . Altimeter's nominees are: 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. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. We can just go through the list, Uber, Facebook, Roblox. A ltimeter Growth Corp. 2, the second blank check company formed by Altimeter Capital targeting the tech sector, filed on Thursday with the SEC to raise up to $200 million in an initial public. We worked hard on the deal and the timing was horrific. This is a hard game. As you know we entered the year with a big bond short, we've now covered that bond short because we don't think that it's possible for the Fed to raise rates 7,10, 12 times as some people think this year. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. 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. Altimeter Growth Corp. raised $450 million in an October 2020 IPO. 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. Meta changed its company name from Facebook to better focus on its VR hardware and software and is spending $10 billion per year on the technology. Congrats on the new show. The conventional wisdom press and investor is that the core business hit a wall last fall. SCOTT WAPNER: Now let's move to an exclusive interview with a marquee investor who saw the destruction in tech coming, Altimeter Capital's founder and CEO Brad Gerstner. In fact, in the most recent quarter, they added 1.4 billion of contracted value. PLAN, Yearly 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. 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. There is no doubt that doubling annual FCF will improve share price. Days Trial 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. Search ISDA ISDA fosters safe and efficient derivatives markets to facilitate effective risk . for a description of how we use cookies. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: 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? See the Top Performing Hedge-Funds > Brad Gerstner . Altimeter Capital Management LLC. The stock is 51% off of its high. Meta. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. Panel led by former SC judge to include NaBFID chair KV Kamath and Infys Nandan Nilekani. 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. 15 "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". NEW YORK, Nov. 16, 2021 (GLOBE NEWSWIRE) -- H1, which provides the largest global healthcare network that connects healthcare professionals, announced today that it has raised a $100M Series C. will trigger a new window or tab to open. In Q1 of 2021, everybody was sitting on their couch. Some companies require tremendous capex investment to maintain their existing business. 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 Altimeter Capital Management is an investment firm that operates within the technology sector. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your They just announced that they're going to be profit, full company profitable by 2023. 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. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. If you look at the company, it's now trading at $5 billion enterprise value. 2023 International Swaps and Derivatives Association, Inc. 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. 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. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. The Meta investor recommends a plan to get the company's "mojo back.". Meta shares moved 6% higher following the announcement. 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. 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. Will His AI Plans Be Any Different? We believe the future lies in AI. Right? Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. 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. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Reels, which is a massive product is going to increase its monetization between now and the end of the year. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. Altimeter is based in California and has about $16 billion in . Now you didn't address any of the iOS changes and the revenue hit that Facebook is is assuming from that and those are legitimate changes. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. With all of this said, we truly believe that the company should be making some of these important investments. 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. When you were with me in December, you said that you had picked some more of that up along with Snowflake. I hear you but look, there are, there are some people who think and it's not maybe it's not a Snowflake, but it's a you know, a basket of these kinds of names that may never get back. 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 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. . And now we've shot right through the five-year average. And then take that part of the world. With all of this said, we truly believe that the company should be making some of these important investments. 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. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! It's a better version of Messenger. Altimeter Feb 2021 - Present2 years 2 months New York, United States Chris is a Partner at Altimeter on the private investing team where he focuses on investing in iconic late stage technology. Indias general insurers are looking to set up a larger marine insurance pool to cover the risks of transporting crude oil, edible oil, project machinery and fertiliser from the war-torn Russia-Ukraine region. They're fearful about the war. GERSTNER: Right, it comes down fundamentally to a question Scott of whether you think we're gonna have more than eight rate increases or less.