altimeter capital letter
It's a better version of Zoom. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Days Trial Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. If the company were investing $12B per year into this project, then that confusion might not even be a problem. click here! And I appreciate you being with me on the very first "Overtime" show. Portfolio Gain +273.45%. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. As you know, we are long-term shareholders. 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. In the back half, you don't have those same comp issues that you have caused by COVID. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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%. Altimeter Capital owns about 2.46 million Meta shares. Read More . And frankly, I don't think we're gonna have hyperinflation in a world where demand is being destroyed at the rate it's currently being destroyed. He said a 20% cut in employee spending would take Meta back to the levels of staffing it had last year and argued that the company can't spend as it used to since the cost of capital and interest rates have risen recently. So take Snowflake as an example. In short, Meta needs to get fit and focused. 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. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and 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. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. 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. The changes for the Quest 2 begin Sunday, March 5. Where's your exposure today? 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. These include white papers, government data, original reporting, and interviews with industry experts. Unlock your 30 days free access to ETPrime now. 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. [3] PAR Capital Management, Inc. Do Not Sell My Personal Data/Privacy Policy. 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: Reduce headcount expense by at least 20%;Reduce annual capex by at least $5 B from $30B to $25B; andLimit investment in metaverse / Reality Labs to no more than $5B per year. Brad Gerstner Altimeter Capital Management, LP Buys Opendoor Technologies Inc, Toast Inc, Duolingo Inc, Sells . 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. Mar 11, 2021 3:07 PM EST. 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%. I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. As a result, the team hastily pivoted the company toward the metaverse including a surprise re-naming of the company to Meta. Ultimately, we and the Board necessarily must share the same objective: maximizing long-term value creation for United's stockholders, customers, and employees. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. There is no doubt that doubling annual FCF will improve share price. Brad, thank you. With the gains posted on March 3, Meta Platforms shares are up 54% this year. 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. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. 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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. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. They are people with families and kids to support. Right? But listen, there's massive uncertainty in the world. Copyright 2023 Bennett, Coleman & Co. Ltd. All rights reserved. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . So listen, I'm not happy about it. A newly launched P2E adventure game, Chronos: Dawn of Tie, has introduced a series of brand-new PvP elimination tournaments.Last month, the whimsical battle game organized its beta stage featuring selected players. We worked hard on the deal and the timing was horrific. It's a better version of Messenger. Paul A. Reeder What is the metaverse and why are billions of dollars being spent on it? "If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.". Altimeter Capital Management LP. Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. Chief Executive Officer 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. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. The answer to that is because people are very fearful. GERSTNER: No, I didn't leave it out. About Altimeter Capital Altimeter is a global investment firm managing both public and private funds focused on the airline, travel, technology, internet, software, and consumer sectors. In short, Meta needs to get fit and focused. Altimeter manages a long / short public equity fund and private growth equity funds. "Bloomberg Opinion" columnists offer their opinions on issues in the news. The last 10 years have been a unique time in tech and for Meta. The full text of the stockholder letter to the United Board follows: March 8, 2016. This is a leading internet company in Southeast Asia. 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. 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 didn't think that was durable. They just announced that they're going to be profit, full company profitable by 2023. 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. 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. When exactly did you determine that the Board was so inadequate as to need four new directors, all at once, and without an annual meeting or a stockholder vote? Days Trial. JavaScript in your web browser. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. I think we spent about an hour together. It's 3 trillion, right? 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. We dont have any demands. Bill Ackman's: Pershing Square Capital Management. Usually you don't capitalize after a colon, but there are exceptions. But Meta needs to get its mojo back. 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. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. 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. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. The Meta investor recommends a plan to get the company's "mojo back.". Over the last three years, Meta has also dramatically increased its capital expenses. So these are different order of magnitude bets. 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). This is a region of 700 million plus people. ", Jitesh Ubrani of market research firm IDCpointed outthat Meta's year-over-year VR shipments plunged 93% in the fourth quarter, while those of Pico from rival ByteDance rose 110%. "Jitesh Ubrani: Tweet From March 3, 2023. . We believe in this team. Headquarters Location One International Place Suite 2400 Boston, Massachusetts, 02110, United States 617-310-6180 Suggest an edit articles a month for anyone to read, even non-subscribers! Global Business and Financial News, Stock Quotes, and Market Data and Analysis. United Continental Holdings, Inc. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. About Kevin Wang. Our Standards: The Thomson Reuters Trust Principles. 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. 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. 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. Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more! Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. They're fearful about what's going to happen with rates. Will His AI Plans Be Any Different? Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. Is it done? We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. 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. With Snowflake, the question as to whether or not that business is going to compound, I think is not one that many people will debate. Grab Holdings is reportedly in talks to go public through a merger with a "blank check" company that could value the Southeast Asian ride-hailing startup at as much as . The silver lining is that unlike many companies, this popular narrative obscures the truth. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. 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. Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. We want to hear from you. If the company were investing $12B per year into this project, then that confusion might not even be a problem.
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