Louis Bacon's: Moore Capital Management. We worked hard on the deal and the timing was horrific. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! Chase Coleman's: Tiger Global Management. ", 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%. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. I said IDFA which is the Apple changes right? That's the asymmetry. But I do believe that this company like the others that we talked about is going to be worth more in the future supported by real free cash flow. GERSTNER: No, I didn't leave it out. The answer to that is because people are very fearful. . 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. Experience Your Economic Times Newspaper, The Digital Way! GERSTNER: Right, it comes down fundamentally to a question Scott of whether you think we're gonna have more than eight rate increases or less. Altimeter Capital Management, LLC. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! At first glance, the rules of English capitalization seem simple. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. 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. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. This is a leading internet company in Southeast Asia. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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. And what is going to be the resolution to the situation in the Ukraine? We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. Rates are going up and we have a war. WAPNER: Okay, that's a that's a big a bold call. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. And frankly, they weren't a very good hedge because bonds haven't moved all that much but gross stocks are down 60, 70, as you mentioned, down over 80%. With the gains posted on March 3, Meta Platforms shares are up 54% this year. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Benzinga does not provide investment advice. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. Meta stock is down over 61% in 2022. It's down 32% in the last 11 months ,that ranks it in the top three of the last 20 years in terms of drawdowns. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. And I appreciate you being with me on the very first "Overtime" show. Those three companies are all down that amount because it turns out that this year people got off their couch, they went out and they went to restaurants and they went in and did things instead of buy things. 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. About Kevin Wang. Founder & Chief Executive Officer at Altimeter Capital . But listen, there's massive uncertainty in the world. 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 . 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. 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. "Jitesh Ubrani: Tweet From March 3, 2023. To put it in perspective, Roblox was a couple percent position for us, right, and Snowflake was a 30% position for us. Some companies require tremendous capex investment to maintain their existing business. It's my job to ask you about it knowing you're not happy about it and you answered the question. The conventional wisdom press and investor is that the core business hit a wall last fall. 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. 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. So you know, when I look at what's going on in the business and I try to distill it from the noise, which is what has made us good for 20 years, not following the crowd, not panicking, but really looking at the business. Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. 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. Reels, which is a massive product is going to increase its monetization between now and the end of the year. In an open letter to CEO Mark Zuckerberg on Monday, shareholder Altimeter Capital Management urged Meta Platforms Inc., the parent company of Facebook, to streamline by eliminating positions and capital expenditures. Login WAPNER: Man, I love how honest you are and I know our viewers do as well. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. At the same time that Meta ramped up spend, you lost the confidence of investors. 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. 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. But you also (sometimes) capitalize the first word of a quote. 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. With all of this said, we truly believe that the company should be making some of these important investments. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. With SNOW currently trading at $242, that stake is now worth $8.8 billion. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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. Some companies require tremendous capex investment to maintain their existing business. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. This is expected to facilitate trade as the West ratchets up sanctions on Russia. Gordon Bethune, former CEO of Continental Airlines; board member of Honeywell, Prudential Financial, and Sprint;
That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. 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. 233 South Wacker Drive
Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. Consumer confidence is plummeting. All quotes delayed a minimum of 15 minutes. 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. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. Our Standards: The Thomson Reuters Trust Principles. We think both of those are solvable. We dont have any demands. What's going to be the inflation print in April? It takes effect in 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. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. There are a lot of companies with speculative business models, right, that are should have never been valued where they were valued and if you don't have absolute conviction, right, they can grow their product, grow their top line and grow their earnings to match where those earlier prices were, then you need to rotate those dollars out of those companies and into companies where you have that level of conviction. Protocol: When you were with me in December, you said that you had picked some more of that up along with Snowflake. Mar 11, 2021 3:07 PM EST. What do you think? GERSTNER: Well, first let's talk about what took Facebook down, right? 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. 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. GERSTNER: Scott, I love that you asked the question. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. Activist investor Brad Gerstner, founder and CEO of tech-focusedhedge fundAltimeter Capital, sent anopen letterto CEOMark Zuckerbergin October calling for a pullback in metaverse spending. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. United has an Underqualified, Ineffective, and Entrenched Board: While presiding over United's stunning long-term underperformance, we believe that the incumbent Board (and a majority of the newly-expanded 15-person Board): (1) lacks sufficient leadership, expertise, and experience to challenge management and hold management accountable, to direct an operational and financial turn-around, and to maximize stockholder value; (2) has entrenched itself by implementing various mechanisms to financially penalize stockholders for making meaningful Board changes; (3) has failed to adequately align management compensation with stockholder interests; and (4) is too stale to effectively represent stockholders.