This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Link to 13F filings: SEC filings He argued that this was "one of the big reasons behind these price cuts.". 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 . We'll see you soon. 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. Steven Cohen's: Point72 Asset Management. BRAD GERSTNER: Hey, Scott, thanks for having me. 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. And I appreciate you being with me on the very first "Overtime" show. 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. 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. After the pandemic, hospitals are now on a strong footing. Altimeter Capital is in talks with ride-hailing company Grab to bring the company public in a $40 billion deal, according to a report from The Wall Street Journal. 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. Can it possibly be worth 200 billion? At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Contact. 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. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. Get your daily dose of business updates on WhatsApp. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! In addition, people are confused by what the metaverse even means. Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. As such, we think during this period of growth transition and economic uncertainty, the company should decrease capex by at least $5B and maintain this discipline until revenues re-accelerate bringing our capex as a percentage of revenue more in line with our large cap peers. We believe the future lies in AI. 233 South Wacker Drive Altimeter.com is Altimeter's only website. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. Altimeter Capital Management LLC. 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. 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. for a description of how we use cookies. 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. Altimeter is focused on technology investment, and has found multi-billion-dollar success. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Adani Group on Thursday said US-based boutique investment firm GQG Partners has picked up equity stakes worth $1.87 billion (15,446 crore) in four listed group companies Adani Ports and Special Economic Zone, Adani Green Energy, Adani Transmission and flagship Adani Enterprises via secondary share sales. If they do it, I think the stock can be up over 50% between now and the end of the year. So no, these issues are rea,l what's going on in Russia is real, what's going on in Europe is real. 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. 9/29/2022 1:05 AM. The facts are startling. It's good to see you again. 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. Meta. David Einhorn's: Greenlight Capital. 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. Unlock your 30 days free access to ETPrime now. We do not take job reductions lightly. I'm not a seller. You do, you do great work, excited for the new show and let's stay after it. Its founder faces criminal and civil charges and goes to trial in October. The stock today hit a new low under $3. 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. 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. Right? 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. I expected that as the world of normalized post Omicron that we would get back to the five-year average multiple. PLAN, Yearly Ultimately, we and the Board necessarily must share the same objective: maximizing long-term value creation for United's stockholders, customers, and employees. The conventional wisdom press and investor is that the core business hit a wall last fall. 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Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. And I've let the company know that, right? If the deal goes through, it. "Bloomberg Opinion" columnists offer their opinions on issues in the news. The answer to that is because people are very fearful. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. However, there are few signs that VR or some of the company's metaverse apps, such as Horizon Worlds, are catching on with the public beyond early adopters. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. A Division of NBCUniversal. It's going to do 20 billion in GMV. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. We have no more confidence that you will act responsibly in the future (even with yesterday's announcement) than we have evidence that you have done so in the past. Reels, which is a massive product is going to increase its monetization between now and the end of the year. 2499 1749, Monthly Louis Bacon's: Moore Capital Management. Now they've told us that they're going to achieve 15% free cash flow margins this year, five years early, right, while still growing 100%. Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. Board of Directors In fact, we distributed over $6 billion worth of Snowflake to our venture investors last year. Stock Radar: 19% from Budget Day! 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs . "In addition, people are confused by what the metaverse even means," Gerstner wrote. 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. 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. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. Remember last year they gave a guide at the beginning of the year they're going to grow at 80%. Today, the cost of capital has radically changed, and so has Metas growth rate. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Whether it is making Whatsapp more seamless or making content and ads more useful on Instagram, Reels and Facebook AI is a globally scarce resource that already is driving noticeable improvements for Metas three billion customers and advertisers. Now you didn't address any of the iOS changes and the revenue hit that Facebook is is assuming from that and those are legitimate changes. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . Over the last three years, Meta has also dramatically increased its capital expenses. Advertisement Gerstner, through Altimeter, manages over $15.0 billion worth of investments across private equity and venture capital. WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. It's interesting that now today you say we're in the neighborhood of a tradable bottom. There is no doubt that doubling annual FCF will improve share price. Meta stock is down over 61% in 2022. It just launched in 150 countries, has over a billion views. Altimeter. Moreover, Meta has industry leading capabilities in key future technologies like artificial intelligence and immersive 3d that will help drive new products and future growth. Got a confidential news tip? GERSTNER: Well, first let's talk about what took Facebook down, right? GERSTNER: Well, the first thing I would say is this, set aside SPAC. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. What do you think? And so we're getting hurt like everybody else. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. 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. 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. WAPNER: I know I know you're not happy about it. 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. 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. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. ", Twitter. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. Meta reported in February that Reality Labs lost $13.72 billion in 2022. Some companies require tremendous capex investment to maintain their existing business. International Swaps and Derivatives Association. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. So were Shopify's and so were PayPal. 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. 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. But what is the right amount? Altimeter Capital Management LP. We know they have high EBITDA margins on the rideshare business which is dominant across the region. It added that VR is "a powerful social platform and creative technology, and the more people with access to it, the better. 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. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. The changes for the Quest 2 begin Sunday, March 5. This will alert our moderators to take action. It's our largest position in the book. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. I think if you said why might these numbers have to come down if we're heading into a recession, the numbers are likely to come down. Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. If the company were investing $12B per year into this project, then that confusion might not even be a problem. Meta and other large companies have made it very difficult for start-ups to hire. browser. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. As you know, we are long-term shareholders. 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. As always, happy to connect with you and your team. You know, I told people at the time that, you know, there's risk in making these investments, right, we're shareholders of this, we've lost capital. Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more! Learn the pros and cons of crowdfunding. Meta changed its company name from Facebook to better focus on its VR hardware and software and is spending $10 billion per year on the technology. 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 . Altimeter Capital Chair and CEO Brad Gerstner, in an open letter to the company, said Meta has too many employees and is moving too slowly to retain the confidence of investors. 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. It did not specify which of Alitmeter's SPACs Grab was in talks with. A Division of NBCUniversal. That stuff was being advertised on Instagram. Altimeter Growth Corp. 2 raised $400 million in a January IPO. Days Trial. 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. That's the asymmetry. Some companies require tremendous capex investment to maintain their existing business. We want to hear from you. All of China internet down over 80%. See here for a complete list of exchanges and delays. 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. Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. 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. 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. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. I think the only debate is what is the multiple going to be in three months, in six months, in nine months. What is the Fed going to do? And now we've shot right through the five-year average. b***@altimeter.com. The firm's private equity arm makes all-stage venture capital investments, primarily in the technology sector. He joins me live. 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. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. Got a confidential news tip? When you were with me in December, you said that you had picked some more of that up along with Snowflake. 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. We're withdrawing trillions off the Fed's balance sheet. Despite public skepticism at times warranted we have been supporters Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. Instead, they grew at 106%. Altimeter Capital. +Includes DocuBay and TimesPrime Membership. 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 nearly $40 billion and . With all of this said, we truly believe that the company should be making some of these important investments. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. 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. 16,839 Followers. 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. A securities lawyer, Brad Gerstner graduated from HBS in 2000 and joined General Catalyst. 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. Getting Fit Headcount Reduction / Expense Control. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Headquarters Location One International Place Suite 2400 Boston, Massachusetts, 02110, United States 617-310-6180 Suggest an edit Altimeter Capital Management is an investment firm that operates within the technology sector. Meta changed its company name from Facebook. The same is true for Microsoft, right? We're down on the year. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. 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. So take Snowflake as an example. Barney Harford, former CEO of Orbitz Worldwide; former board member of Orbitz Worldwide and eLong; We have no stimulus checks. At the same time that Meta ramped up spend, you lost the confidence of investors. So we're in the neighborhood of a tradable bottom.
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