Dont miss out on ET Prime stories! It's 3 trillion, right? We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. 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. Altimeter Capital Management, LP Buys Opendoor Technologies Inc, Toast Inc, Duolingo Inc, Sells . 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 . As you know, we are long-term shareholders. See here for a complete list of exchanges and delays. Altimeter is focused on technology investment, and has found multi-billion-dollar success. articles a month for anyone to read, even non-subscribers! FREE Breaking News Alerts from StreetInsider.com! Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. Portfolio Gain +273.45%. 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. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. Some companies require tremendous capex investment to maintain their existing business. Meta. I imagine they're going to be super aggressive about how they're buying back shares. It's a better version of Messenger. Our best guess is that maintenance capex for Meta is less than $10B annually. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Bruce Berkowitz's: Fairholme Capital Management. So we've taken up our exposure, we've consolidated behind our five or six best ideas, we don't run leverage and so the bet for our LPs, I'm the largest LP in the fund. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. Further strengthening our own conclusions, your seemingly desperate actions yesterday appear as a transparent and cynical attempt to maintain your official privileges and power, despite your long historical record of deficient oversight on behalf of stockholders. You do, you do great work, excited for the new show and let's stay after it. I expected that as the world of normalized post Omicron that we would get back to the five-year average multiple. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. 2023 Benzinga.com. Dear Chairman Meyer and Board Members: That could in fact become a tailwind as we get to the back half of the year. +Includes DocuBay and TimesPrime Membership. Getting Fit Headcount Reduction / Expense Control. And I think they have to execute against the underlying operations in the business. GERSTNER: Without a doubt the single biggest lever on growth multiples is rates. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 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. 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. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. 2023 International Swaps and Derivatives Association, Inc. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. In addition, people are confused by what the metaverse even means. 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 It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. 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 . PLAN. The stock today hit a new low under $3. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. And Meta certainly has abundant financial resources to invest and / or return to shareholders. The silver lining is that unlike many companies, this popular narrative obscures the truth. Chief Executive Officer But listen, there's massive uncertainty in the world. So, it doesn't surprise me at all that buyers are on the sidelines and that sellers and short sellers are having a field day with stocks. 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. About Altimeter Capital Altimeter is a global investment firm managing both public and private funds focused on the airline, travel, technology, internet, software, and consumer sectors. So these are different order of magnitude bets. effective risk management for all users of derivative products. We worked hard on the deal and the timing was horrific. Stock Radar: 19% from Budget Day! When exactly did you determine that the Board was so inadequate as to need four new directors, all at once, and without an annual meeting or a stockholder vote? Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. Altimeter Capital owns about 2.46 million Meta shares. $6.9 M. will trigger a new window or tab to open. Board of Directors And so we're getting hurt like everybody else. Data is a real-time snapshot *Data is delayed at least 15 minutes. It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people. 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. 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. 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." Brad Gerstner founded the. Investopedia requires writers to use primary sources to support their work. 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. As you know, we are long-term shareholders. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . 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 do not take job reductions lightly. Founder & Chief Executive Officer at Altimeter Capital . He said a 20% cut in employee spending would take Meta back to the levels of staffing it had last year and argued that the company can't spend as it used to since the cost of capital and interest rates have risen recently. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world. This is a hard game. But the company's dreams have fallen short as the Reality Labs unit, which works on augmented and virtual reality, has continuously reported staggering losses. "Jitesh Ubrani: Tweet From March 3, 2023. I mean you have defended it at every turn from the issues that the company has had you you defended Mark Zuckerberg, you've defended Sheryl Sandberg and you you did it quite loudly on this program. The definitions and provisions contained in the Protocol Agreement are incorporated into this Adherence Letter, which will supplement and form part of each Protocol Covered Agreement between us and each other Adhering Party. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. We're withdrawing trillions off the Fed's balance sheet. Mar 11, 2021 3:07 PM EST. Revenue. Chase Coleman's: Tiger Global Management. If they just take the incremental cash they're going to generate this year and buy back shares that's 6% of the company Scott, let alone the 50 billion in cash they have sitting on the balance sheet. Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time. Altimeter.com is Altimeter's only website. Nobody debates whether or not this company is going to be more valuable in the future. I don't think Mark did a particularly good job of explaining the meta investments. Altimeter Capital Management LP Info Size ($ 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. Round: Series D Description: Ro is a telehealth startup that operates digital health clinics for men's and women's health, along with smoking cessation. 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. 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. We did not see this talk of 10 rate hikes and we certainly didn't see a war developing in Europe. Paul A. Reeder Altimeter. 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. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. 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. We can just go through the list, Uber, Facebook, Roblox. Protocol: That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. Investopedia does not include all offers available in the marketplace. Got a confidential news tip? ISDA fosters safe and efficient derivatives markets to facilitate Conforti plans to join a new firm as a co-founder with. What is the rate of increase? 10. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 2550 Sand Hill Road, Suite 150. In the letter, Gerstner said Altimeter Capital doesn't have demands and simply wants to engage with Meta management. 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. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. 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. Altimeter Capital owns about 2.46 million Meta shares. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. On top of that we had supply chain challenges. 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. 16,839 Followers. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. SPACs notched more than $70 billion so far in 2021, a new record. This is a region of 700 million plus people. 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. 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. WAPNER: Okay, that's a that's a big a bold call. Ranked #76 out of 483 Hedge Fund Managers. After the pandemic, hospitals are now on a strong footing. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? All quotes delayed a minimum of 15 minutes. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; 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 Choose your reason below and click on the Report button. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. 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. 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. 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. 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. In addition, people are confused by what the metaverse even means. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. 9/29/2022 1:05 AM. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. Do they want to stand with me and ride that out? 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. 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. They may never get back to the levels at which they traded before. 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. 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. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. 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. GERSTNER: So let's talk for a second about what I called. Every company I talked to is tightening its belts. 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. Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. 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. JavaScript in your web browser. It makes no sense to me, but that is the risk that you run. 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. 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. March 8, 2016 It lost $5.8 billion in the first six months of the year. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Trading Book: Climate Risk Scenario Analysis Close Cart 0; Reveal page search bar; ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. 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. Rates are going up and we have a war. Where's your exposure today? You got a lot of this right but multiples have come down a heck of a lot to this point. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/03/14/we-could-go-lower-before-we-go-higher-in-stocks-says-altimeter-capitalas-ceo-brad-gerstner.html. I don't think they can. 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. The facts are startling. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. That's what makes markets. 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. 41,300 crore) to $25 billion (roughly Rs. With all of this said, we truly believe that the company should be making some of these important investments. Today, the cost of capital has radically changed, and so has Metas growth rate. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! BRAD GERSTNER: Hey, Scott, thanks for having me. 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. We further understand that ISDA assigned a unique identification code or ALID to each adherence letter that was accepted for the August 2012 Protocol or the March 2013 Protocol and that, in order to amend a Protocol Covered Agreement pursuant to: (i) Appendix 1 to this Protocol (which is intended to top up agreements made pursuant to the August 2012 Protocol), we must provide our August 2012 Protocol ALID below; or (ii) Appendix 2 to the Protocol (which is intended to top up agreements made pursuant to the March 2013 Protocol), we must provide our March 2013 Protocol ALID below: FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. 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.
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