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With all of this said, we truly believe that the company should be making some of these important investments. I have been told that Amazon spent far less in total to build AWS. See the Top Performing Hedge-Funds > Brad Gerstner . 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. It's down 32% in the last 11 months ,that ranks it in the top three of the last 20 years in terms of drawdowns. 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 all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 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. It's going to do 20 billion in GMV. This is a leading internet company in Southeast Asia. We believe the future lies in AI. 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 would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. Panel led by former SC judge to include NaBFID chair KV Kamath and Infys Nandan Nilekani. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. PLAN. They just announced that they're going to be profit, full company profitable by 2023. They're fearful about what's going to happen with rates. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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). 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. Includes DocuBay and TimesPrime Membership. Getting Fit Headcount Reduction / Expense Control. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. Altimeter manages a long / short public equity fund and private growth equity funds. What do you think? 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 includes reducing headcount expenses by 20% and limiting the company's pricey investments in "metaverse" technology to no more than $5 billion per year. Focusing the Metaverse: the Next Generation of Communication and Collaboration. 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 . You can learn more about the standards we follow in producing accurate, unbiased content in our. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. In preparation for its first-ever mass tournament, Chronos will feature a fantasy-theme RPG with the potential to earn prizes and a chance to win based on the classes of playable . And for us, we consolidate behind the things we have deep conviction in with confidence they're going to be worth more in the future. FTX's list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield,. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. Portfolio Gain +273.45%. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. 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. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Revenue. 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. ", Twitter. Altimeter Capital. It's 3 trillion, right? 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. Brad Gerstner founded the. It's a better version of Messenger. GERSTNER: So, Scott that you know the top six names in our book are all companies that we believe are, you know, both accelerating, expanding margins, expanding free cash flow margins, right, and that are critically important and will be worth more in the future. The full text of the stockholder letter to the United Board follows: March 8, 2016. 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. 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%. 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). 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. Got a confidential news tip? And what is going to be the resolution to the situation in the Ukraine? We do not take job reductions lightly. Updated on September 30, 2022. GERSTNER: Well, the first thing I would say is this, set aside SPAC. With that said, we have a shortage of talent in Silicon Valley. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. 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. 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. WAPNER: Okay, that's a that's a big a bold call. They are people with families and kids to support. So I am very unhappy because I've lost money on the deal. 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. 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. 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. Altimeter Capital Management is an investment firm that operates within the technology sector. To read full story, subscribe to ET Prime, Billed annually at Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. 233 South Wacker Drive 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. I can't tell you what's going to happen the next three days or the next three weeks or even three months. It's been a big drawdown this year. Is it close to being done? Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. So take Snowflake as an example. Everybody knows we've been in this company for a long time. Rates are going up and we have a war. That was our baseline that we were going to have a relatively soft landing, three to four rate hikes. The average tech IPOs down almost 50% from last year, SPACs much worse, direct list bad, all stocks that were taken public last year now it's clear were overvalued relative to where the world is trading them today. I imagine they're going to be super aggressive about how they're buying back shares. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. And so we're getting hurt like everybody else. The same is true for Microsoft, right? 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." Meta didn't immediately respond to a request for comment. The firm's private equity arm makes all-stage venture capital investments, primarily in the technology sector. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. What is the Fed going to do? Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. 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. We did not see this talk of 10 rate hikes and we certainly didn't see a war developing in Europe. In short, Meta needs to get fit and focused. The Meta investor recommends a plan to get the company's "mojo back.". Choose your reason below and click on the Report button. Consumer confidence is plummeting. 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. "Jitesh Ubrani: Tweet From March 3, 2023. Usually you don't capitalize after a colon, but there are exceptions. See here for a complete list of exchanges and delays. 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? PLAN, Yearly How many increases? Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Board of Directors Global Business and Financial News, Stock Quotes, and Market Data and Analysis. I think you're gonna see monetization gains against IDFA and either way we lap that issue in Q3 and Q4. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. It's a better version of Zoom. 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. browser. 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. 2023 CNBC LLC. 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. And we've had government intervention of the magnitude. Experience Your Economic Times Newspaper, The Digital Way! As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. Superficial change in panicked response to rigorous scrutiny is hardly noble or a basis for stockholders to have confidence in your judgment. Right? Altimeter Capital is an American investment firm based in Boston, Massachusetts and Menlo Park, California. I mean, two years ago we were we were having this conversation. If multiples expand then you have even more upside. "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.