altimeter capital letter altimeter capital letter

These are not numbers on a spreadsheet. 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. I think we spent about an hour together. ISDA fosters safe and efficient derivatives markets to facilitate WAPNER: Okay, that's a that's a big a bold call. 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. Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: This compensation may impact how and where listings appear. Privacy Policy, ISDA uses cookies to enhance your experience on our website. 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. 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. We certainly are neither short-term traders nor activists. We were about 30% to 40% depending upon which basket you looked at software internet above the five-year average. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. With that said, we have a shortage of talent in Silicon Valley. 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. What Does Metaverse Mean and How Does This Virtual World Work? Louis Bacon's: Moore Capital Management. All rights reserved. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. 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. Right? 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. As always, happy to connect with you and your team. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . Altimeter Capital Management is an investment firm that operates within the technology sector. Updated on September 30, 2022. 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. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. click here! Altimeter Growth Corp. 2 raised $400 million in a January IPO. Meta stock is down over 61% in 2022. Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; Altimeter is focused on technology investment, and has found multi-billion-dollar success. Mar 11, 2021 3:07 PM EST. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. [3] I'm not a seller. 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. 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. We were wrong. What is the rate of increase? 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. 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. Please refer to the section on cookies in our Website Privacy Policy Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . 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. 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). This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. "In short, Meta needs to get fit and focused.". 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. 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. Our best guess is that maintenance capex for Meta is less than $10B annually. 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. The cumulative benefit of the recommended adjustments outlined above would increase FCF by at least $20B in 2023 ($10B from people-related expense reduction, $5B from capex reduction, and $5B from reduced metaverse spend). He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. 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. Brad Gerstner's Phone Number and Email Last Update. The offers that appear in this table are from partnerships from which Investopedia receives compensation. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. A Division of NBCUniversal. Are you as optimistic today as you were in months past? And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Altimeter Capital Management, LLC. . Welcome to "Overtime.". 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. After the pandemic, hospitals are now on a strong footing. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. WAPNER: Speaking of going higher up, you see what interest rates are doing today after sitting in a tight spot, they've started to move to 11. 2499 1749, Monthly So we believe not only you're going to get dramatically accelerated earnings, right, we think they're going to be a little bit more cautious about how they're spending those meta investment dollars, how they're spending dollars across the business. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . I can't tell you what's going to happen the next three days or the next three weeks or even three months. effective risk management for all users of derivative products. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. Focusing the Metaverse: the Next Generation of Communication and Collaboration. Altimeter Capital Management LP Info Size ($ in 1000's) At 12/31/2022: $3,652,571 At 09/30/2022: $4,676,285 Altimeter Capital Management LP holdings changes, total fund size, and other information presented on HoldingsChannel.com was derived from Altimeter Capital Management LP 13F filings. Conclusion A Leaner, Faster, More Successful Meta. Altimeter Capital owns about 2.46 million Meta shares. Revenue. About Altimeter Capital We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. Altimeter Capital Management is a technology focused investment firm based in Menlo Park, CA and Boston, MA. 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. Some companies require tremendous capex investment to maintain their existing business. On Oct. 11, Meta announced a new high-end VR headset, the Quest Pro. Will His AI Plans Be Any Different? 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. 2023 Benzinga.com. Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. 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. That's because enterprises love their product. The silver lining is that unlike many companies, this popular narrative obscures the truth. 233 South Wacker Drive So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. Meta. The bottom line is where I wanted to start this whole interview with is you called it. I have been told that Amazon spent far less in total to build AWS. Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. They're fearful about what's going to happen with rates. 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. You can learn more about the standards we follow in producing accurate, unbiased content in our. 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? If you have a two-to-three-year time horizon, there is no doubt there are a lot of stocks that are going to be up well over 100% off this bottom. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. Nobody debates whether or not this company is going to be more valuable in the future. 10. We do not take job reductions lightly. We believe the future lies in AI. 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. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. 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. The bet . Investopedia does not include all offers available in the marketplace. Bruce Berkowitz's: Fairholme Capital Management. 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. 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. 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. 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. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. I have spent over 20 years investing behind some of the worlds great founders who are helping to invent the technologies that move the world forward. It makes no sense to me, but that is the risk that you run. Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. 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. The move comes amid a decline in Meta's VR shipments and pressure from activist shareholders to improve the financial picture of its metaverse division. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. 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 . 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. Tesla recalls 3,470 Model Y vehicles over loose bolts, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D'Silva, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, Exclusive: Snapchat kicks few children off app in Britain, data given to regulator shows, Exclusive news, data and analytics for financial market professionals. 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. There is no doubt that doubling annual FCF will improve share price. Ranked #76 out of 483 Hedge Fund Managers. How big is that market? WAPNER: Man, I love how honest you are and I know our viewers do as well. And then take that part of the world. 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. 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. What is the Fed going to do? 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. Capitalizing on the fund's VC success, Gerstner raised $450M for Altimeter Growth Corp (AGCUU), a blank check company IPO targeting the tech sector. Is it all about rates at this point, especially when you're talking about the kinds of vulnerable stocks that we've really had front and center, those being tech? It did not specify which of Alitmeter's SPACs Grab was in talks with. They're fearful about the war. We do not take job reductions lightly. I think, or inflation, I think they're behind the curve on recession. But far from being a bad decision, 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. Dave Baszucki of Roblox describes the metaverse as the natural evolution of communication a multi-device world, including the phone, that is best thought of as a better version of text, video, and voice that will make us feel more connected. 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? 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. ET on GuruFocus.com Builders Union LLP Buys AppLovin Corp, Match. So I think they got to match the investment to the revenue growth of the business. Meta and other large companies have made it very difficult for start-ups to hire. Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time. Our Standards: The Thomson Reuters Trust Principles. will trigger a new window or tab to open. We can just go through the list, Uber, Facebook, Roblox. We want to hear from you. In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. "An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards," Gerstner wrote. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 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. We had given most of that up by middle of December. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. GERSTNER: Right Scott so that you know I started off by saying you know we've been beaten up this year like everybody else because I was covering shorts as we approach the five-year average. So I am very unhappy because I've lost money on the deal. If you click the "Accept" button, you consent to the use of cookies on our website. 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. Can it possibly be worth a trillion? 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. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. We dont have any demands. You probably know you should capitalize proper nouns and the first word of every sentence. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. 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. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. If you look at the company, it's now trading at $5 billion enterprise value. PLAN, Yearly Consumer confidence is plummeting. Right. I don't think there's any chance that the Fed is going to raise rates 10 times this year. Comprender el funcionamiento social, poltico, econmico, cultural y natural de la sociedad a fin de reflexionar, hacer propuestas y asumir compromiso en torno a las polticas de desarrollo nacional, local y regional en el mbito del respeto de los derechos humanos, la integracin econmica y la convivencia social, bajo una concepcin de desarrollo humano sostenible. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. I don't think they can. Warren Buffett's: Berkshire Hathaway. It can compound its earnings and this that and the other but I need to know can it get back to that level. 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. 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. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. Chase Coleman's: Tiger Global Management. 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. Consumer confidence is plummeting. But Meta needs to get its mojo back. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. When you look at these questions, it comes down to this. 2023 CNBC LLC. I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. David Einhorn's: Greenlight Capital. Days Trial 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. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? The cumulative benefit of the recommended adjustments outlined above would increase FCF by at least $20B in 2023 ($10B from people-related expense reduction, $5B from capex reduction, and $5B from reduced metaverse spend). On top of that we had supply chain challenges. 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.