Altimeter Capital. With that said, we have a shortage of talent in Silicon Valley. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019. c/o Chairman Henry L. Meyer III See the Top Performing Hedge-Funds > Brad Gerstner . We know they have high EBITDA margins on the rideshare business which is dominant across the region. Its founder faces criminal and civil charges and goes to trial in October. This will alert our moderators to take action. 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. 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. It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. 2550 Sand Hill Road, Suite 150. . 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%. 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. WAPNER: I know I know you're not happy about it. I think the only debate is what is the multiple going to be in three months, in six months, in nine months. And so for us, it's about simplification, reduction of gross and making sure that you consolidate that what you own into your highest conviction ideas whether you're playing at home in your 401k or whether you're doing this professionally. 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 . In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 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. While the increased AI investment was clearly well timed, Metas investment in the metaverse, while smaller than the AI investment, has gotten the most attention and has led to much confusion. We want to hear from you. I remember people asking that question about Amazon. 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. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. They may never get back to the levels at which they traded before. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. Brad Gerstner is the Founder & Chief Executive Officer at Altimeter Capital based in Boston, Massachusetts. Altimeter's nominees are: Right? The bottom line is where I wanted to start this whole interview with is you called it. 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. What is the rate of increase? Protocol: But I think if you have a time horizon over the course of the one to three years, we see a lot of stocks in our universe that we not only think are going to end the year higher, but we think are going to be multiples higher as we look out over the next two to three years. 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. Benchmark Reform and Transition from LIBOR InfoHub, Use of Chinese Government Bonds as Margin, Updated OTC Derivatives Compliance Calendar, ISDA-Clarus RFR Adoption Indicator: January 2023. If Meta was able to control those costs, he said, then it could double its free cash flow and improve its share price. Chase Coleman's: Tiger Global Management. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. 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. Meta stock is down over 61% in 2022. 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. The full text of the stockholder letter to the United Board follows: March 8, 2016. So take Snowflake as an example. Got a confidential news tip? They're building their own ad platform, right, that can deal with this. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. Right. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. "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. Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Brad Gerstner founded the. To set a new and better course for the Company, and to give United stockholders the opportunity to elect the Board they deserve, Altimeter has delivered to you a notice today indicating its intention to nominate six highly qualified professionals led by former Continental Airlines CEO Gordon Bethune to the United Board at the 2016 annual stockholder meeting. 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: As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. 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. Dear Chairman Meyer and Board Members: FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. 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. 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. We have no more confidence that you will act responsibly in the future (even with yesterday's announcement) than we have evidence that you have done so in the past. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. It's a better version of Messenger. You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. Unlock your 30 days free access to ETPrime now. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. I don't think there's any chance that the Fed is going to raise rates 10 times this year. I think, or inflation, I think they're behind the curve on recession. It lost $5.8 billion in the first six months of the year. If the deal goes through, it. It did not specify which of Alitmeter's SPACs Grab was in talks with. These are not numbers on a spreadsheet. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. 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. Facebook's revenues in Q1 were lower than people expected. On top of that we had supply chain challenges. Meta and other large companies have made it very difficult for start-ups to hire. International Swaps and Derivatives Association. Board of Directors 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 . It's been a half century since Australia and China established formal relations, but neither side is really celebrating. In fact, in the most recent quarter, they added 1.4 billion of contracted value. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Can they maintain their growth momentum? This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. Right. 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. Conclusion A Leaner, Faster, More Successful Meta. 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. It makes no sense to me, but that is the risk that you run. Our best guess is that maintenance capex for Meta is less than $10B annually. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and David Einhorn's: Greenlight Capital. WAPNER: Okay, that's a that's a big a bold call. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. Focusing the Metaverse: the Next Generation of Communication and Collaboration. These are not numbers on a spreadsheet. Login 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. Sign up for free newsletters and get more CNBC delivered to your inbox. 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. Altimeter Capital Management LLC. So I am very unhappy because I've lost money on the deal. I said IDFA which is the Apple changes right? Right? To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! About Altimeter Capital Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. We didn't think that was durable. 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 Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 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. We're withdrawing trillions off the Fed's balance sheet. But the fact of the matter is the entire market has evaporated around these types of stocks. We have not made this difficult decision lightly, but after thorough, serious, and objective analysis, we feel compelled to act. It's a better version of Zoom. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. Mar 11, 2021 3:07 PM EST. Do they want to stand with me and ride that out? 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. And I've let the company know that, right? Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. Are you as optimistic today as you were in months past? Bill Ackman's: Pershing Square Capital Management. 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. And Meta certainly has abundant financial resources to invest and / or return to shareholders. See here for a complete list of exchanges and delays. Or it's well over a trillion, Microsoft 3 trillion. About Altimeter Capital Altimeter is a leading technology focused investment firm based in Silicon Valley with over $15 billion in assets from endowments, foundations, and family offices. 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. 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. 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. Is it close to being done? It's been a big drawdown this year. If the company were investing $12B per year into this project, then that confusion might not even be a problem. I mean, we're talking about billions of dollars in revenue but you left that out. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. As you know, Altimeter Capital Management and PAR Capital Management are long-term United Continental Holdings, Inc. ("United") stockholders that together own approximately 7.1% of United's outstanding common stock. I don't think they can. Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. The changes for the Quest 2 begin Sunday, March 5. 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. Altimeter Capital Management, LP Buys Opendoor Technologies Inc, Toast Inc, Duolingo Inc, Sells . 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. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. ", Medium.com. 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,. Investopedia requires writers to use primary sources to support their work. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. 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. 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. If the company were investing $12B per year into this project, then that confusion might not even be a problem. It's 3 trillion, right? Stock Radar: 19% from Budget Day! And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. So we're in the neighborhood of a tradable bottom. Grab Holdings is reportedly in talks to go public through a merger with a "blank check" company that could value the Southeast Asian ride-hailing startup at as much as . Conclusion A Leaner, Faster, More Successful Meta. GERSTNER: So let's talk for a second about what I called. We had given most of that up by middle of December. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. The facts are startling. And so we're getting hurt like everybody else. 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. What is the metaverse and why are billions of dollars being spent on it? 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.
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