No matter how a company came public in 2021, let alone December of 2021, right, they've been obliterated. 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. Get this delivered to your inbox, and more info about our products and services. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. Altimeter Capital Management is an investment firm that operates within the technology sector. Headquarters Location One International Place Suite 2400 Boston, Massachusetts, 02110, United States 617-310-6180 Suggest an edit Subject: Meaningful Board Change Required Data is a real-time snapshot *Data is delayed at least 15 minutes. Our best guess is that maintenance capex for Meta is less than $10B annually. It's good to see you again. They may never get back to the levels at which they traded before. Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (NASDAQ: META) and Mark Zuckerberg. 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. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. It was being purchased on the Shopify platform and people were using PayPal to check out. 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. 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%. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. b***@altimeter.com. We dont have any demands. 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. 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. 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. SPACs notched more than $70 billion so far in 2021, a new record. 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. 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 would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. We are confident that these employees will find replacement jobs and quickly be back to work on important inventions that will move us all forward. But you also (sometimes) capitalize the first word of a quote. Right. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. Capitalizing on the fund's VC success, Gerstner raised $450M for Altimeter Growth Corp (AGCUU), a blank check company IPO targeting the tech sector. effective risk management for all users of derivative products. 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. 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. I don't think there's any chance that the Fed is going to raise rates 10 times this year. 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. 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. 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. It's a better version of Zoom. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. Focusing the Metaverse: the Next Generation of Communication and Collaboration. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. ", Medium.com. 233 South Wacker Drive 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. Now that's what's going on in the business so all those people writing rest in peace epitaphs for Facebook are going to have to deal with that acceleration. Is it close to being done? I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. WAPNER: I wanna, I want to take a break and get into some of those names of all four but before I do that lastly, you mentioned very interestingly that you've taken your bond short off. 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. 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. I can't tell you what's going to happen the next three days or the next three weeks or even three months. 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. At first glance, the rules of English capitalization seem simple. Southeast Asian superapp Grab is likely to set a world record by selling itself into a special purpose acquisition company, or SPAC, run by U.S. tech venture capital investors Altimeter Capital . 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. Welcome to "Overtime.". If they do it, I think the stock can be up over 50% between now and the end of the year. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. You know how to time markets. The Meta investor recommends a plan to get the company's "mojo back.". So take Snowflake as an example. Usually you don't capitalize after a colon, but there are exceptions. 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. Get your daily dose of business updates on WhatsApp. If you click the "Accept" button, you consent to the use of cookies on our website. GERSTNER: So let's talk for a second about what I called. That's why even the sell side consensus numbers have their growth rate accelerating, almost doubling between Q2 and Q4 of this year and we think it will accelerate even faster. [3] In short, Meta needs to get fit and focused. What do you think? 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. 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. He also asked Zuckerberg to cut down on capex and employee expenses. 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. 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. 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. 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. "Jitesh Ubrani: Tweet From March 3, 2023. . 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. We'll see you soon. PLAN. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. Rates are going up and we have a war. But it's good to be here and and you know, while I think we we did see the normalization and multiples as a likely outcome toward the end of last year. 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. 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GERSTNER: Well, the first thing I would say is this, set aside SPAC. Our Standards: The Thomson Reuters Trust Principles. 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. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. The bet . 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. 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. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. GERSTNER: Without a doubt the single biggest lever on growth multiples is rates. 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. Updated on September 30, 2022. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". Brad Gerstner A Division of NBCUniversal. With all of this said, we truly believe that the company should be making some of these important investments. 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. 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. 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. So I am very unhappy because I've lost money on the deal. 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. We do not take job reductions lightly. 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. The last 10 years have been a unique time in tech and for Meta. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your Altimeter Capital Management is a hedge fund with 17 clients and discretionary assets under management (AUM) of $17,950,309,162 (Form ADV from 2022-05-27). We worked hard on the deal and the timing was horrific. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. 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. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. 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. It just launched in 150 countries, has over a billion views. That could in fact become a tailwind as we get to the back half of the year. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. 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. "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". But what is the right amount? And so that will be rolled out in Q2 and Q3. You got a lot of this right but multiples have come down a heck of a lot to this point. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Altimeter Growth Corp. raised $450 million in an October 2020 IPO. We believe in this team. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. Includes DocuBay and TimesPrime Membership. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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. In the back half, you don't have those same comp issues that you have caused by COVID. 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 is a technology focused investment firm based in Menlo Park, CA and Boston, MA. Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: The facts are startling. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. This is a leading internet company in Southeast Asia. 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. Altimeter's nominees are: When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. And what is going to be the resolution to the situation in the Ukraine? Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. 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. Some companies require tremendous capex investment to maintain their existing business. Meta. To put that in perspective, it merely takes the company back to mid-2021 levels of employee expense and I dont think anybody would argue that Meta wasnt sufficiently staffed in 2021 to tackle a business that looks similar to how it looks today. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. The conventional wisdom press and investor is that the core business hit a wall last fall. Meta stock is down over 61% in 2022. 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. Some companies require tremendous capex investment to maintain their existing business. All of China internet down over 80%. The silver lining is that unlike many companies, this popular narrative obscures the truth. Dear Chairman Meyer and Board Members: 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. Nobody debates whether or not this company is going to be more valuable in the future. 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. Choose your reason below and click on the Report button. It can do great this, the business can be incredible. 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. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. GERSTNER: Scott, I love that you asked the question. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. The answer to that is because people are very fearful. Popular Searches. FTX founder Sam Bankman-Fried was not only a tireless fundraiser from venture capital firms including Paradigm and Sequoia Capital, but also quietly made investments in those same funds, according to two people familiar with the matter. 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. Following careful consideration, we have firmly concluded that meaningful change to United's existing Board of Directors is urgently required in order to reverse long-standing poor Board governance and the resulting many years of substantial and inexcusable Company underperformance relative to United's competitors. 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. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. These include white papers, government data, original reporting, and interviews with industry experts. That's the asymmetry. Regrettably, our efforts have led to our complete loss of confidence in the current Board, and to our firm determination that meaningful, stockholder-directed Board change is urgently required to serve the long-term best interests of United's stockholders, customers, and employees. We have no stimulus checks. Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . UPDATE: Altimeter Capital, PAR Capital Issue Letter to United Continental Board - United Airlines Holdings (NASDAQ:UAL) - Benzinga SPY 397.68 0.74% QQQ 293.61 0.83% BTC/USD 22299.46 5.109%. You can learn more about the standards we follow in producing accurate, unbiased content in our. "In addition, people are confused by what the metaverse even means," Gerstner wrote. He joins me live. Are you as optimistic today as you were in months past? Altimeter manages a long / short public equity fund and private growth equity funds. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. I mean, two years ago we were we were having this conversation. Privacy Policy, ISDA uses cookies to enhance your experience on our website. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. The silver lining is that unlike many companies, this popular narrative obscures the truth. We didn't think that was durable. We understand that the Protocol is designed to amend only those Protocol Covered Agreements between two Adhering Parties that were previously amended pursuant to the terms of the August 2012 Protocol, the March 2013 Protocol or both. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. 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). Instead, they grew at 106%. Whatever the reason, that is certainly the perception. 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. And frankly, I don't think we're gonna have hyperinflation in a world where demand is being destroyed at the rate it's currently being destroyed. 15 Credit Derivatives Determinations Committees, how to enable With that said, we have a shortage of talent in Silicon Valley. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. So we're in the neighborhood of a tradable bottom. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. What Does Metaverse Mean and How Does This Virtual World Work? International Swaps and Derivatives Association. 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 . The full text of the stockholder letter to the United Board follows: March 8, 2016. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. 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. 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. 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. 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.