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. 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. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. It takes effect in 2023. I can't tell you what's going to happen the next three days or the next three weeks or even three months. Headquarters Location One International Place Suite 2400 Boston, Massachusetts, 02110, United States 617-310-6180 Suggest an edit 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." 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. And I appreciate you being with me on the very first "Overtime" show. WAPNER: I hear you. He also asked Zuckerberg to cut down on capex and employee expenses. Paul A. Reeder 15 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. . 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. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. Over the last three years, Meta has also dramatically increased its capital expenses. "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. 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. We can just go through the list, Uber, Facebook, Roblox. 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. It's good to see you again. 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. Altimeter Capital is in talks with ride-hailing company Grab to bring the company public in a $40 billion deal, according to a report from The Wall Street Journal. As always, happy to connect with you and your team. And I think they have to execute against the underlying operations in the business. 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. It has 24 billion in free cash they're going to generate this year. Consumer confidence is plummeting. 2499 1749, Monthly That stuff was being advertised on Instagram. But what is the right amount? Dear Chairman Meyer and Board Members: 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. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; It just launched in 150 countries, has over a billion views. 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. [2] The firm focuses on technology investments in both public and private markets globally. 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. "If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.". 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. Brad Gerstner's Phone Number and Email Last Update. You know how to time markets. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. 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. 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. 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. 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. Mar 11, 2021 3:07 PM EST. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. 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%. When you look at these questions, it comes down to this. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. 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. You do, you do great work, excited for the new show and let's stay after it. 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. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . We've destroyed over $15 trillion of stock market wealth. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". 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. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. 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. c/o Altimeter Capital Management, LP. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. GERSTNER: Scott, thanks for having me. Dont miss out on ET Prime stories! Hedge Fund Manager. Right. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. After several years of growing tensions, the potential for a reset under Australia's new Labor government is in question as trade sanctions remain and diplomatic disputes persist. 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. WAPNER: I know I know you're not happy about it. At the end of the second. August 2012 Protocol ALID: 66703 Instead, they grew at 106%. 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. Over the last three years, Meta has also dramatically increased its capital expenses. Whatever the reason, that is certainly the perception. We have $130 oil and $6 gas at the pump. Meta stock is down over 61% in 2022. 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. 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. So if you want to bet on the future of growth, Southeast Asia is one of the places you want to bet this is one of the dominant brands, dominant internet platforms, and it's got 7 billion of cash on the balance sheet. The Meta investor recommends a plan to get the company's "mojo back.". We were wrong. 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. That's because enterprises love their product. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. SPACs notched more than $70 billion so far in 2021, a new record. The silver lining is that unlike many companies, this popular narrative obscures the truth. It said Grab is expected to raise between. Gordon Bethune, former CEO of Continental Airlines; board member of Honeywell, Prudential Financial, and Sprint; It's been a big drawdown this year. They are people with families and kids to support. With SNOW currently trading at $242, that stake is now worth $8.8 billion. 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. Despite public skepticism at times warranted we have been supporters Sign up for free newsletters and get more CNBC delivered to your inbox. All quotes delayed a minimum of 15 minutes. You can learn more about the standards we follow in producing accurate, unbiased content in our. "Jitesh Ubrani: Tweet From March 3, 2023. Altimeter Capital. On top of that we had supply chain challenges. ", Jitesh Ubrani of market research firm IDCpointed outthat Meta's year-over-year VR shipments plunged 93% in the fourth quarter, while those of Pico from rival ByteDance rose 110%. ", Twitter. What do you think? It's our largest position in the book. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. We want to hear from you. "In short, Meta needs to get fit and focused.". Altimeter's nominees are: If Meta was able to control those costs, he said, then it could double its free cash flow and improve its share price. Dave Baszucki of Roblox describes the metaverse as the natural evolution of communication a multi-device world, including the phone, that is best thought of as a better version of text, video, and voice that will make us feel more connected. Trading Book: Climate Risk Scenario Analysis Close Cart 0; Reveal page search bar; ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Altimeter Capital Management LP Info Size ($ 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. 2023 CNBC LLC. It makes no sense to me, but that is the risk that you run. 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. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. Altimeter Capital owns about 2.46 million Meta shares. Some companies require tremendous capex investment to maintain their existing 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. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. With all of this said, we truly believe that the company should be making some of these important investments. If the deal goes through, it. 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. 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. And so we add on a fair amount of exposures we entered this year. Chicago, IL 60606 With all of this said, we truly believe that the company should be making some of these important investments. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. The answer to that is because people are very fearful. A Division of NBCUniversal. If they do it, I think the stock can be up over 50% between now and the end of the year. 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%. 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. 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. How many dogs want to eat the dog food? 2023 Benzinga.com. 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. So take Snowflake as an example. In fact, we distributed over $6 billion worth of Snowflake to our venture investors last year. 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 "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". 233 South Wacker Drive There is no doubt that doubling annual FCF will improve share price. It lost $5.8 billion in the first six months of the year. 41,300 crore) to $25 billion (roughly Rs. 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. Link to 13F filings: SEC filings 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 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 Meta needs to get its mojo back. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself.
altimeter capital letter
