altimeter capital letter

2023 International Swaps and Derivatives Association, Inc. 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. Mar 11, 2021 3:07 PM EST. That could in fact become a tailwind as we get to the back half of the year. We'll see you soon. Meta changed its company name from Facebook. 2023 CNBC LLC. They're building their own ad platform, right, that can deal with this. 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. 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. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. If they do it, I think the stock can be up over 50% between now and the end of the year. Will His AI Plans Be Any Different? I'm not a seller. effective risk management for all users of derivative products. 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). 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. 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. With all of this said, we truly believe that the company should be making some of these important investments. 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. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. All quotes delayed a minimum of 15 minutes. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. 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. 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 . These times are what try people if you dig a hole and get into the hole here at the bottom after having lost, you know, my sense is you're locking in losses that you're going to come to regret. 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. "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," Gerstner wrote in the letter. I have been told that Amazon spent far less in total to build AWS. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your That stuff was being advertised on Instagram. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. That's what makes markets. Brad Gerstner Consumer confidence is plummeting. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. 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. . "An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards," Gerstner wrote. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. 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 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. BRAD GERSTNER: Hey, Scott, thanks for having me. We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. Altimeter is focused on technology investment, and has found multi-billion-dollar success. About Kevin Wang. 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. Following is a link to video on CNBC.com: 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. 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. Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . Altimeter Capital Management, LLC. 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 committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . 15 As I look at it, the market is now pricing in at least seven rate hikes. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. 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. If the deal goes through, it. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. 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. We believe in this team. Subject: Meaningful Board Change Required The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . ", Twitter. These are not numbers on a spreadsheet. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! Altimeter is based in California and has about $16 billion in . That's because enterprises love their product. 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. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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. . Altimeter Capital Management LLC. It was being purchased on the Shopify platform and people were using PayPal to check out. 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. Sign up for free newsletters and get more CNBC delivered to your inbox. WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. Is it close to being done? Login Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. 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. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. Open letter: Altimeter Capital founder and CEO Brad Gerstner encourages Meta to cut capex by $5B+, cut headcount by 20%+, and limit metaverse R&D to $5B/year As you know, we are long-term shareholders. 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. Altimeter manages a long / short public equity fund and private growth equity funds. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. 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. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. Dont miss out on ET Prime stories! At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. Revenue. GERSTNER: So let's talk for a second about what I called. So take Snowflake as an example. Before we we move, what do I do with Facebook? We worked hard on the deal and the timing was horrific. You probably know you should capitalize proper nouns and the first word of every sentence. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. The full text of the stockholder letter to the United Board follows: March 8, 2016. Today, the cost of capital has radically changed, and so has Metas growth rate. In short, Meta needs to get fit and focused. It's been a big drawdown this year. 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. He also asked Zuckerberg to cut down on capex and employee expenses. The deal values the combined company at $35 billion and will. 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. Experience Your Economic Times Newspaper, The Digital Way! Unlock your 30 days free access to ETPrime now. FalconX Raises $210M Following 30x YoY Revenue Growth; Now Valued at $3.75 Billion Series C Led by Altimeter Capital, B Capital Group, Sapphire Ventures, and Tiger Global Management, with. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. I don't think stocks today reflect a great price discovery about where these stocks are going to be in six months, let alone two years, but I'm also eyes wide open to the fact that we could go lower before we go higher. And now we've shot right through the five-year average. The last 10 years have been a unique time in tech and for Meta. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. Nov. 16, 2021 at 2:38 p.m. "In addition, people are confused by what the metaverse even means," Gerstner wrote. 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. The offers that appear in this table are from partnerships from which Investopedia receives compensation. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. What do you think? I think the only debate is what is the multiple going to be in three months, in six months, in nine months. 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. They were buying goods, soccer balls on DICK's Sporting Goods and candles on Williams Sonoma. What am I supposed to think about that? An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. They're fearful about what's going to happen with rates. March 2013 Protocol ALID: 66704. Focusing the Metaverse: the Next Generation of Communication and Collaboration. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. This is expected to facilitate trade as the West ratchets up sanctions on Russia. In the back half, you don't have those same comp issues that you have caused by COVID. See here for a complete list of exchanges and delays. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Altimeter Capital owns about 2.46 million Meta shares. I think we spent about an hour together. Conclusion A Leaner, Faster, More Successful Meta. 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. When you look at these questions, it comes down to this. GERSTNER: Scott, I love that you asked the question. 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%. That's the asymmetry. Altimeter. 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. How big is that market? Over the last three years, Meta has also dramatically increased its capital expenses. Days Trial ISDA 2021 SBS Top-Up Protocol, Adhering Organization: Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 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%. Ranked #76 out of 483 Hedge Fund Managers. The comp against IDFA was very difficult in Q1 and will again be difficult in q2. It's interesting that now today you say we're in the neighborhood of a tradable bottom. . Learn the pros and cons of crowdfunding. The lagging stock price under this Board's control and supervision directly reflects substantial underperformance in terms of operational reliability, customer satisfaction, market share, profitability, and return on invested capital. Capital October 20, 2022 Risk & Capital. 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. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. 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. And so, for our LPs, the bet is simple. 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. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. And what is going to be the resolution to the situation in the Ukraine? And so we add on a fair amount of exposures we entered this year. [2] The firm focuses on technology investments in both public and private markets globally. It can do great this, the business can be incredible. Musk Made a Mess at Twitter. 9/29/2022 1:05 AM. 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. Altimeter LLC. With all of this said, we truly believe that the company should be making some of these important investments. He joins me live. 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. PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. Meta shares moved 6% higher following the announcement. Headquarters Location One International Place Suite 2400 Boston, Massachusetts, 02110, United States 617-310-6180 Suggest an edit I think that this is a business that is investing in the right things. It's good to see you again. By Altimeter Capital $750M Venture Capital in Feb, 2021 VROOM E-Commerce +2 Total funding $1.2B in 10 rounds from 15 investors By Altimeter Capital $50M Series E in Sep, 2016 Wingz Networking +3 Total funding $13.7M in 4 rounds from 36 investors By Altimeter Capital $11M Series B in Jan, 2016 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. In a single quarter, they added 1.4 billion. 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. 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. Includes DocuBay and TimesPrime Membership. The last 10 years have been a unique time in tech and for Meta. GERSTNER: Scott, thanks for having me. Usually you don't capitalize after a colon, but there are exceptions. Chief Executive Officer 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. 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. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. 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. Altimeter Capital Management, ISDA 2021 SBS Top-Up Protocol - Adherence. Published Jan 7, 2021 6:11AM EST A ltimeter Growth Corp. 2, the second blank check company formed by Altimeter Capital targeting the tech sector, raised $400 million by offering 40 million. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. At first glance, the rules of English capitalization seem simple. We think both of those are solvable. SPACs notched more than $70 billion so far in 2021, a new record. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. International Swaps and Derivatives Association. 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. Sign up for free newsletters and get more CNBC delivered to your inbox. Meta didn't immediately respond to a request for comment. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! They are people with families and kids to support. In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. Privacy Policy, ISDA uses cookies to enhance your experience on our website. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. 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. Think about this, Scott. A Division of NBCUniversal. Skip to main content. As you know, we are long-term shareholders. 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. Altimeter Capital Management is an investment firm that operates within the technology sector. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Protocol: c/o Altimeter Capital Management, LP. 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. 2023 Benzinga.com. ISDA fosters safe and efficient derivatives markets to facilitate [3] Chief Executive Officer All Rights Reserved. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. Brad, thank you. Meta. 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. 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. 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. 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. United Continental Holdings, Inc. 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. We believe in this team. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. I have been told that Amazon spent far less in total to build AWS. Every company I talked to is tightening its belts. 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." 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. And as a result, you know, last year we held up better than most because we own high-quality stocks, and we were short lower quality stocks. It will get there three years from now because it's free cash flow margin will continue to expand and if you just get it, give it the multiples that are currently in the market, right, that have already drawn down on free cash flow, you get to that 3X that I quoted. Ro $500.0M. This is a region of 700 million plus people. It's 3 trillion, right? They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. David Einhorn's: Greenlight Capital. Nobody debates whether or not this company is going to be more valuable in the future. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. But Meta needs to get its mojo 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. Altimeter Growth Corp. 2 raised $400 million in a January IPO. I said IDFA which is the Apple changes right? Chicago, IL 60606 And I appreciate you being with me on the very first "Overtime" show. But what is the right amount? Where's your exposure today? Bruce Berkowitz's: Fairholme Capital Management. What Does Metaverse Mean and How Does This Virtual World Work? You know how to time markets. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (NASDAQ: META) and Mark Zuckerberg. Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: Updated on September 30, 2022. How big are the margins, ultimately Snowflake will be worth a lot more because there is almost endless demand for the product and this is a business that is highly profitable. On top of that we had supply chain challenges. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. I can't tell you what's going to happen the next three days or the next three weeks or even three months. 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. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; 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. You do, you do great work, excited for the new show and let's stay after it. We want to hear from you. 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. CAPEX Investing Aggressively and Responsibly in the Future of AI. So were Shopify's and so were PayPal. Meta and other large companies have made it very difficult for start-ups to hire. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. We believe the future lies in AI. 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. Brad Gerstner founded the. We have no stimulus checks. articles a month for anyone to read, even non-subscribers! Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

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