In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. effective risk management for all users of derivative products. Sign up for free newsletters and get more CNBC delivered to your inbox. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 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. And I appreciate you being with me on the very first "Overtime" show. It's been a big drawdown this year. CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad Gerstner Speaks with CNBC's Scott Wapner on "Closing Bell: Overtime" Today Published Mon, Mar 14 20225:56 PM EDT Share. You know, I said on Twitter a few weeks ago, I don't think the Fed's behind the curve on rates. 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. Australian Gold & Copper Ltd. - MarketWatch Musk Made a Mess at Twitter. I think that this is a business that is investing in the right things. Altimeter Capital Portfolio Investments, Altimeter Capital Funds 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 . $6.9 M. Altimeter Capital Fund Manager Profile | Preqin 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. Chase Coleman's: Tiger Global Management. "In short, Meta needs to get fit and focused.". Altimeter Capital launched its two SPACs in October and January, raising a combined $850 million between the two blank-check vehicles. 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 notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Right if the Fed raises rates 10 or 12 times given the demand destruction and the slowdown already underway in this country, we will be in a big recession come fall. At the same time that Meta ramped up spend, you lost the confidence of investors. Altimeter Capital owns about 2.46 million Meta shares. 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 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. 41,300 crore) to $25 billion (roughly Rs. And so we add on a fair amount of exposures we entered this year. WAPNER: Man, I love how honest you are and I know our viewers do as well. Altimeter is focused on technology investment, and has found multi-billion-dollar success. 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. Brad, thank you. Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. We also reference original research from other reputable publishers where appropriate. To accomplish this goal, we recommend a three step plan that will double FCF to $40 B per year and focus the companys teams and investments: Getting Fit Headcount Reduction / Expense Control. 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. Altimeter is based in California and has about $16 billion in . 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. When you were with me in December, you said that you had picked some more of that up along with Snowflake. These include white papers, government data, original reporting, and interviews with industry experts. The industry leader for online information for tax, accounting and finance professionals. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. 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. 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. Some companies require tremendous capex investment to maintain their existing business. And I've let the company know that, right? We've never seen on the order of magnitude of the Marshall Plan at the beginning of COVID. You can learn more about the standards we follow in producing accurate, unbiased content in our. Meta shares moved 6% higher following the announcement. Is it close to being done? Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. PLAN. It said Grab is expected to raise between. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. It's a better version of Messenger. But it's good to be here and and you know, while I think we we did see the normalization and multiples as a likely outcome toward the end of last year. Ram Parameswaran: The Investment Philosophy of an Internet Investor Enjoy a 7-Day Free Trial Thru Feb 17, 2023! 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. 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. 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. Consumer confidence is plummeting. And Meta certainly has abundant financial resources to invest and / or return to shareholders. We're down on the year. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. Ultimately, we and the Board necessarily must share the same objective: maximizing long-term value creation for United's stockholders, customers, and employees. In Q1 of 2021, everybody was sitting on their couch. This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, More Iranian Schoolgirls Sickened in Suspected Poisoning Wave, No Major Offer Expected on Childcare in UK Budget, Oil Investors Get $128 Billion Handout as Doubts Grow About Fossil Fuels, Climate Change Is Launching a MutantSeed Space Race, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! This is a hard game. The facts are startling. Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. We believe in this team. At the same time that Meta ramped up spend, you lost the confidence of investors. Grab to list in US via $40 bln merger with Altimeter Growth If multiples expand then you have even more upside. Meta shareholder wants Facebook parent to cut jobs, spending Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. About Altimeter Capital With all of this said, we truly believe that the company should be making some of these important investments. Link to 13F filings: SEC filings Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. We had given most of that up by middle of December. ", Medium.com. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. The social media company had in June cut plans to hire engineers by at least 30%, with Zuckerberg warning employees to brace for an economic downturn. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. 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. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. In his open letter, Gerstner asked Meta to cap its expenditure on the metaverse to $5 billion a year from the current announced investment of $10-15 billion. Investopedia requires writers to use primary sources to support their work. Steven Cohen's: Point72 Asset Management. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. Why 20%? The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Is it done? Capitalization Rules-A Quick Guide | Grammarly This heavy equipment maker is a good buy on dips stock; heres why, Tears from smokeless cooking gas as consumers continue to bear price hikes on top of subsidy cuts. Where's your exposure today? GERSTNER: Well, first let's talk about what took Facebook down, right? Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Altimeter Capital Management, ISDA 2021 SBS Top-Up Protocol - Adherence. ISDA fosters safe and efficient derivatives markets to facilitate CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad 'Super-Sized and Terrifying': Zuckerberg's $100B Metaverse Gamble With that said, we have a shortage of talent in Silicon Valley. Altimeter Capital's Brad Gerstner calls on Meta to slash headcount Getting Fit Headcount Reduction / Expense Control. Get this delivered to your inbox, and more info about our products and services. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. In short, Meta needs to get fit and focused. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. 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. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. I don't think they can. Altimeter manages a long / short public equity fund and private growth equity funds. 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. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. What is the metaverse and why are billions of dollars being spent on it? 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. TEORIA ECONOMICA Y SOCIOPOLITICA DESCRIPTORES MNIMOS.pdf Roblox Raises $520M led by Altimeter Capital and Dragoneer Investment He joins me live. I said IDFA which is the Apple changes right? +Includes DocuBay and TimesPrime Membership. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. 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. 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. 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. To experience the full functionality of the ISDA website, it is necessary to enable Javascript in your But I am confident these companies like Snowflake, like Uber, like Facebook are going to be worth more than they are today at significantly more if you look out two years. This is a leading internet company in Southeast Asia. Usually you don't capitalize after a colon, but there are exceptions. Protocol: 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. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Brad Gerstner's Phone Number and Email Last Update. And we've had government intervention of the magnitude. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. c/o Chairman Henry L. Meyer III The same is true for Microsoft, right? Two years from now, people are going to be looking back and say, why the hell didn't you buy Snowflake at 160 bucks a share? 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. But admittedly, you know, nights like tonight we'll we'll get we'll catch a little less sleep. In the back half, you don't have those same comp issues that you have caused by COVID. PLAN, Access the exclusive Economic Times stories, Editorial and Expert opinion, 90 Days Prime access worth Rs999 unlocked for you, Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors, Stock analysis. Right. 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. Home : Altimeter FTX, once the third-largest centralized cryptocurrency exchange, is now in U.S. bankruptcy. We worked hard on the deal and the timing was horrific. 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. See here for a complete list of exchanges and delays. Meta reported in February that Reality Labs lost $13.72 billion in 2022. This is a company that only did 1.2 billion in revenue last year. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. United Continental Holdings, Inc. 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%. The purpose of this letter is to confirm our adherence as a Protocol Participant to the ISDA 2021 SBS Top-Up Protocol Agreement as published by the International Swaps and Derivatives Association, Inc. on February 25, 2021 (the Protocol Agreement). The offers that appear in this table are from partnerships from which Investopedia receives compensation. 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. A Division of NBCUniversal. 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. As between each other Adhering Party and us, the amendments in the Appendices to the Protocol shall apply to each Protocol Covered Agreement to which we are a party in accordance with the terms of the Protocol and this Adherence Letter. 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. Altimeter Capital Management LP Top Holdings 13F Filings NEW YORK, Nov. 16, 2021 (GLOBE NEWSWIRE) -- H1, which provides the largest global healthcare network that connects healthcare professionals, announced today that it has raised a $100M Series C. Conforti plans to join a new firm as a co-founder with. That's what makes markets. 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. We've destroyed over $15 trillion of stock market wealth. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . Portfolio Gain +273.45%. Samooha, a startup developing a "cross-cloud" data collaboration platform, today announced that it raised $12.5 million in a funding tranche backed by Altimeter Capital and Snowflake Ventures . United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. Drew Angerer | Getty Images News | Getty Images, Meta needs to focus on its core business, not the Metaverse, says Sand Hill's Brenda Vingiello. 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. Altimeter. 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. We dont have any demands. QUARTERLY LETTER 2022 | Vol.1 1345 AVENUE OF THE AMERICA S 33RDFLOOR NEW YORK, NY 10105 HAYDENCAPITAL.COM HAYDEN CAPITAL 2 May 20, 2022 Dear Partners and Friends, The last six months have been extremely painful - by far, the worst period since we started Hayden. "If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.". Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. Meta Shareholder Writes Critical Open Letter, Saying the Company Needs We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. I expected that as the world of normalized post Omicron that we would get back to the five-year average multiple. Meta Slashes Prices for VR Headsets We believe the future lies in AI. 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. Why 20%? PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. With the gains posted on March 3, Meta Platforms shares are up 54% this year. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. 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. 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. 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. Some companies require tremendous capex investment to maintain their existing business. That could in fact become a tailwind as we get to the back half of the year. 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. 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. Their last reported 13F filing for Q4 2022 included $3,652,571,000 in managed 13F securities and a top 10 holdings concentration of 99.95%. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. There is no doubt that doubling annual FCF will improve share price. 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. 2023 Benzinga.com. If the company were investing $12B per year into this project, then that confusion might not even be a problem. But you also (sometimes) capitalize the first word of a quote. This will alert our moderators to take action. Q1 2021: 13 Largest Global Startup Funding Rounds - AlleyWatch An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. Altimeter Capital Management, - GuruFocus.com Right? click here! We have $130 oil and $6 gas at the pump. 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. Altimeter Growth Corp. 2 raised $400 million in a January IPO. Why didn't you buy, you know, Uber at 28 bucks a share? 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. 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. August 2012 Protocol ALID: 66703 The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Instead, they grew at 106%. Data is a real-time snapshot *Data is delayed at least 15 minutes. 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. Brad Gerstner's Altimeter Capital has an $8B profit on Snowflake. A new