The offers that appear in this table are from partnerships from which Investopedia receives compensation. Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (NASDAQ: META) and Mark Zuckerberg. Is it done? AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. All Rights Reserved. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. WAPNER: Okay, that's a that's a big a bold call. 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. 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. 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. It has 24 billion in free cash they're going to generate this year. Congrats on the new show. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. Can it possibly be worth a trillion? Whatever the reason, that is certainly the perception. We're down on the year. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. Grab Reportedly Set to List in US Via SPAC Merger at $35 Billion Valuation 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 . They just announced that they're going to be profit, full company profitable by 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! I think we spent about an hour together. Altimeter Capital Management LLC. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. We don't think we're going to have 10 rate hikes and we do think there'll be an off ramp to the situation in Ukraine. Altimeter Capital Management, ISDA 2021 SBS Top-Up Protocol - Adherence. Benzinga does not provide investment advice. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 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 Meta Shareholder Writes Critical Open Letter, Saying the Company Needs browser. Ro $500.0M. If you look at the company, it's now trading at $5 billion enterprise value. Capital October 20, 2022 Risk & Capital. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. I remember people asking that question about Amazon. Altimeter Capital Management, - GuruFocus.com ET on GuruFocus.com Builders Union LLP Buys AppLovin Corp, Match. FTX's Bankman-Fried Quietly Invested More than $500 Million in Sequoia +Includes DocuBay and TimesPrime Membership. 2023 CNBC LLC. PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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. 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. They're fearful about what's going to happen with rates. GERSTNER: So, Scott that you know the top six names in our book are all companies that we believe are, you know, both accelerating, expanding margins, expanding free cash flow margins, right, and that are critically important and will be worth more in the future. The last 10 years have been a unique time in tech and for Meta. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. I have been told that Amazon spent far less in total to build AWS. Barney Harford, former CEO of Orbitz Worldwide; former board member of Orbitz Worldwide and eLong; 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. You got a lot of this right but multiples have come down a heck of a lot to this point. Investors Who Put $2 Billion Into FTX Face Scrutiny, Too Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. 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. 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. It can do that by making. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. We were about 30% to 40% depending upon which basket you looked at software internet above the five-year average. JavaScript in your web browser. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. ISDA fosters safe and efficient derivatives markets to facilitate I think that this is a business that is investing in the right things. And I've let the company know that, right? What is the Fed going to do? 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 believe the future lies in AI. 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. 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. What Does Metaverse Mean and How Does This Virtual World Work? 10. My bet is we're gonna have less this year. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. I mean, two years ago we were we were having this conversation. You know, I told people at the time that, you know, there's risk in making these investments, right, we're shareholders of this, we've lost capital. Chief Executive Officer Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. How many dogs want to eat the dog food? When you were with me in December, you said that you had picked some more of that up along with Snowflake. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. This will alert our moderators to take action. Altimeter Capital Chair and CEO Brad Gerstner, in an open letter to the company, said Meta has too many employees and is moving too slowly to retain the confidence of investors. Instead, they grew at 106%. 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,. I don't think the Fed is going to throw away two years' worth of work to try to avoid a recession in a election year and run us straight into the teeth of a recession while we're trying to fight a war in Europe. Altimeter manages a long / short public equity fund and private growth equity funds. 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. 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.. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. Altimeter Capital's Brad Gerstner calls on Meta to slash headcount 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. Founder & Chief Executive Officer at Altimeter Capital . We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. Altimeter Capital launched its two SPACs in October and January, raising a combined $850 million between the two blank-check vehicles. Meta shareholder wants Facebook parent to cut jobs, spending Ram Parameswaran: The Investment Philosophy of an Internet Investor 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. What's going to be the inflation print in April? Skip to main content. It's my job to ask you about it knowing you're not happy about it and you answered the question. Warren Buffett's: Berkshire Hathaway. Contact. Altimeter Capital - Wikipedia 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 believe the future lies in AI. Kevin Wang - Forbes It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. It can compound its earnings and this that and the other but I need to know can it get back to that level. Our best guess is that maintenance capex for Meta is less than $10B annually. Brad, thank you. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. Please refer to the section on cookies in our Website Privacy Policy In the letter, Gerstner said Altimeter Capital doesn't have demands and simply wants to engage with Meta management. Is it close to being done? . 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%. . 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. We're not in the business of being long or short bonds generally I'd put them on as a hedge against our growth exposure. 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. Altimeter. 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. And I think they have to execute against the underlying operations in the business. 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. for a description of how we use cookies. Meta and other large companies have made it very difficult for start-ups to hire. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. Its founder faces criminal and civil charges and goes to trial in October. But Meta needs to get its mojo back. Paul A. Reeder As you know, we are long-term shareholders. It makes no sense to me, but that is the risk that you run. Meta changed its company name from Facebook. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. What do you think? I mean, we're talking about billions of dollars in revenue but you left that out. Privacy Policy, ISDA uses cookies to enhance your experience on our website. Altimeter Capital Management LP. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. 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. Altimeter Capital. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Updated on September 30, 2022. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. But remember, Facebook's not just sitting there with his hands in the air saying oh my goodness, what can we do in a world where Apple wants to flex its monopolistic muscle and steal all of our advertisers. But what is the right amount? ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. United Continental Holdings, Inc. 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 . The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. Today, the cost of capital has radically changed, and so has Metas growth rate. Conforti plans to join a new firm as a co-founder with. Like many other companies in a zero rate world Meta has drifted into the land of excess too many people, too many ideas, too little urgency. Altimeter Capital Portfolio Investments, Altimeter Capital Funds 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. Capitalization Rules-A Quick Guide | Grammarly Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. The stock is 51% off of its high. March 2013 Protocol ALID: 66704. Link to 13F filings: SEC filings Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: Accept. Southeast Asian Superapp Grab Could Set SPAC Record Why 20%? ISDA is a registered trademark of the International Swaps and Derivatives Association, Inc. 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. 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. 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. 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. 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%. We dont have any demands. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. As you know, we are long-term shareholders. Bruce Berkowitz's: Fairholme Capital Management. ISDA fosters safe and efficient derivatives markets to facilitate 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. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and 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.

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