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. It's going to do 20 billion in GMV. Right? Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. Musk Made a Mess at Twitter. It's interesting that now today you say we're in the neighborhood of a tradable bottom. . The company explained that its goal has always been to "create hardware that's affordable for as many people as possible to take advantage of all that VR has to offer." Australian Gold & Copper Ltd. - MarketWatch 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. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. As you know, we are long-term shareholders. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. 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. Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. Altimeter Capital owns about 2.46 million Meta shares. We have $130 oil and $6 gas at the pump. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. As you know, we are long-term shareholders. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. 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. Meta shareholder wants Facebook parent to cut jobs, spending Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; To put it in perspective, Roblox was a couple percent position for us, right, and Snowflake was a 30% position for us. 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. Home : Altimeter Altimeter's second tech SPAC Altimeter Growth Corp. 2 files - Nasdaq By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. 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. Potential Choices for HF Roles from Undergrad | Wall Street Oasis Wall Street closes sharply higher, notches weekly gains as Treasury yields ease, Morgan Stanley reaffirms Top Pick on Apple (AAPL) stock, sees catalyst-rich event path, Amazon (AMZN) pausing construction on second HQ in Virginia - Bloomberg, Broadcom Q1 results & guidance beat estimates; analysts praise 'stellar' execution, Dell reverses early gains on soft outlook; analyst reactions mixed, Embark Trucks (EMBK) to reduce workforce, explore strategic alternatives including liquidation, Ford Motor (F) Declares $0.65 Special Dividend; 4.5% Yield, Crypto firms behind Tether used falsified documents to maintain banking system access - WSJ, Altamira Therapeutics (CYTO) Reports Study Showing Bentrio's Superior Nasal Residence Time and Rheological Properties, Desktop Metal (DM) jumps on chatter of deal with Apple, Midday movers: C3 AI, Costco, Zscaler and more, Dell, Zscaler, ChargePoint fall premarket; Tesla, Hewlett Packard rise, After-hours stock movers: C3.ai jumps on results, Zscaler falls, Macy's, Salesforce and Okta rise premarket; Silvergate, Tesla fall, After-hours movers: Salesforce surges on beat, Silvergate falls on 'going concern' warning. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. Usually you don't capitalize after a colon, but there are exceptions. 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 Management LLC. It's my job to ask you about it knowing you're not happy about it and you answered the question. 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. Board of Directors I mean you have defended it at every turn from the issues that the company has had you you defended Mark Zuckerberg, you've defended Sheryl Sandberg and you you did it quite loudly on this program. And I think they have to execute against the underlying operations in the business. The move comes amid a decline in Meta's VR shipments and pressure from activist shareholders to improve the financial picture of its metaverse division. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 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. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. These are not numbers on a spreadsheet. 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. browser. In short, Meta needs to get fit and focused. It's down 32% in the last 11 months ,that ranks it in the top three of the last 20 years in terms of drawdowns. 2550 Sand Hill Road, Suite 150. Everybody knows we've been in this company for a long time. 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. Meta shareholder Altimeter urges Facebook parent to cut down jobs, expenses We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. Altimeter Capital Management, LLC. 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. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Meta reported in February that Reality Labs lost $13.72 billion in 2022. 2499 1749, Monthly Brad Gerstner's Phone Number and Email Last Update. As always, happy to connect with you and your team. Drew Angerer | Getty Images News | Getty Images, Meta needs to focus on its core business, not the Metaverse, says Sand Hill's Brenda Vingiello. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Some companies require tremendous capex investment to maintain their existing business. And so we add on a fair amount of exposures we entered this year. "We think the recommendations outlined above will lead to a leaner, more productive, and more focused company a company that regains its confidence and momentum," Gerstner wrote. I think the only debate is what is the multiple going to be in three months, in six months, in nine months. Meta didn't immediately respond to a request for comment. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. 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. But what is the right amount? Ram Parameswaran: The Investment Philosophy of an Internet Investor We certainly our base case, as you know, was a soft landing four to five rate hikes into this year. Meta and other large companies have made it very difficult for start-ups to hire. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". Whatever the reason, that is certainly the perception. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. What Does Metaverse Mean and How Does This Virtual World Work? The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. We also reference original research from other reputable publishers where appropriate. 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. 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. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. We didn't think that was durable. He argued that this was "one of the big reasons behind these price cuts.". Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! 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. 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. WAPNER: I know I know you're not happy about it. Updated on September 30, 2022. 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. Unlock your 30 days free access to ETPrime now. You know how to time markets. We dont have any demands. Grab to list in US via $40 bln merger with Altimeter Growth These include white papers, government data, original reporting, and interviews with industry experts. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. Protocol: The bet . 41,300 crore) to $25 billion (roughly Rs. 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. 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. The offers that appear in this table are from partnerships from which Investopedia receives compensation. It did not specify which of Alitmeter's SPACs Grab was in talks with. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking We had given most of that up by middle of December. The average tech IPOs down almost 50% from last year, SPACs much worse, direct list bad, all stocks that were taken public last year now it's clear were overvalued relative to where the world is trading them today. Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. Today, the cost of capital has radically changed, and so has Metas growth rate. CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad Altimeter Capital's Brad Gerstner calls on Meta to slash headcount We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. I remember people asking that question about Amazon. "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," Gerstner wrote in the letter. JavaScript in your web browser. 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. We want to hear from you. In fact, in the most recent quarter, they added 1.4 billion of contracted value. They are people with families and kids to support. Southeast Asia's Grab in talks for U.S. listing via $40 billion SPAC 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. Altimeter SPAC Taking Grab Public | PYMNTS.com Altimeter Capital Management LP. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and "Bloomberg Opinion" columnists offer their opinions on issues in the news. 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. And we've had government intervention of the magnitude. 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. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. With SNOW currently trading at $242, that stake is now worth $8.8 billion. The last 10 years have been a unique time in tech and for Meta. 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. Every company I talked to is tightening its belts. The answer to that is because people are very fearful. Digital Markets Act (DMA): How the EU Law Will Work, Mark Zuckerberg: Founder and CEO of Meta (formerly Facebook), Crowdfunding: What It Is, How It Works, Popular Websites, FTX: An Overview of the Exchange and Its Collapse, New Prices for Meta Quest 2s 256GB SKU + Meta Quest Pro, Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors), Meta Reports Fourth Quarter and Full Year 2022 Results. We've destroyed over $15 trillion of stock market wealth. Altimeter Capital owns about 2.46 million Meta shares. If you look at, if you look at, you know, what we expect to occur over the rest of the year, this stock will compound as it continues to beat earnings, as it continues to expand its use cases, even without multiples expanding, right, as investors begin to look at those higher numbers in '23 and '24. Dont miss out on ET Prime stories! Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. 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. 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. 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. If you look at the company, it's now trading at $5 billion enterprise value. 2023 Benzinga.com. 2023 CNBC LLC. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. It's 3 trillion, right? We're withdrawing trillions off the Fed's balance sheet. But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. 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. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. Top 10 Stocks Held By Altimeter Capital Management LP FTX's Bankman-Fried Quietly Invested More than $500 Million in Sequoia 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. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; 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 has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. 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. Experience Your Economic Times Newspaper, The Digital Way! 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%. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. I think we spent about an hour together. How many increases? As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. They were buying goods, soccer balls on DICK's Sporting Goods and candles on Williams Sonoma. Revenue. 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? Enjoy a 7-Day Free Trial Thru Feb 17, 2023! He also asked Zuckerberg to cut down on capex and employee expenses. 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. Why 20%? 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. Includes DocuBay and TimesPrime Membership. That's the asymmetry. The silver lining is that unlike many companies, this popular narrative obscures the truth. PLAN. SPACs notched more than $70 billion so far in 2021, a new record. 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. For reprint rights: Continue reading with one of these options: Login to get access to some exclusive stories, Get access to exclusive stories, expert opinions &, Valid only with UPI, Credit & Debit Cards Autopay, Inciting hatred against a certain community, 15 Get this delivered to your inbox, and more info about our products and services. WAPNER: We're back now with Altimeter Capital's Brad Gerstner hanging out with us at "Overtime" today, You know, we talked about the magnitude Brad by which some of these stocks have come down and I'm looking at the, listen, it's not just Meta, obviously. 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. In preparation for its first-ever mass tournament, Chronos will feature a fantasy-theme RPG with the potential to earn prizes and a chance to win based on the classes of playable . 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. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. It's a better version of Zoom. 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. That could in fact become a tailwind as we get to the back half of the year. I can't tell you what's going to happen the next three days or the next three weeks or even three months. 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.. 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. At the same time that Meta ramped up spend, you lost the confidence of investors. Grab's SPAC Vehicle Altimeter Near Record Low After 28% Dive c/o Altimeter Capital Management, LP. You got a lot of this right but multiples have come down a heck of a lot to this point. effective risk management for all users of derivative products. Altimeter's nominees are: 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'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. 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.
How To Give Space Between Two Tables In Html,
25,000 Steps In Calories,
Pompa Iron Resurrection Net Worth,
Government Recording And Transfer Fees Are Prepaid Costs,
What Happened To Rachel From Mojo In The Morning,
Articles A
