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And I've let the company know that, right? Meta changed its company name from Facebook. 2550 Sand Hill Road, Suite 150. Accept. Worse, this skepticism seemed to be affirmed with a nearly-immediate and sizable miss in financial results and continued under-performance throughout 2022. "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. I have been told that Amazon spent far less in total to build AWS. And so we add on a fair amount of exposures we entered this year. 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." Potential Choices for HF Roles from Undergrad | Wall Street Oasis Whatever the reason, that is certainly the perception. GERSTNER: No, I didn't leave it out. They are people with families and kids to support. 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. Facebook parent Meta Platforms (META) announced that it would reduce selling prices for its Quest virtual reality (VR) headsets. I think the only debate is what is the multiple going to be in three months, in six months, in nine months. 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. Over the last three years, Meta has also dramatically increased its capital expenses. Hedge Fund Manager. I think we spent about an hour together. It's 3 trillion, right? Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. This is a region of 700 million plus people. So if you want to bet on the future of growth, Southeast Asia is one of the places you want to bet this is one of the dominant brands, dominant internet platforms, and it's got 7 billion of cash on the balance sheet. Altimeter Capital partner Kevin Wang led the firm's investment in cloud data platform Snowflake in 2015 in its $45 million Series C round; he sat on its board until 2020. In Q1 of 2021, everybody was sitting on their couch. What Does Metaverse Mean and How Does This Virtual World Work? This is a company that only did 1.2 billion in revenue last year. H1 Raises $100M Series C to Expand Footprint, Make H1 the So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. 2023 CNBC LLC. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. Get this delivered to your inbox, and more info about our products and services. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. 2023 CNBC LLC. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. It did not specify which of Alitmeter's SPACs Grab was in talks with. WAPNER: Man, I love how honest you are and I know our viewers do as well. 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. 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. 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. Right? 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. The full text of the stockholder letter to the United Board follows: March 8, 2016. 2-Year Finally, Prudential PLC lifted its . ", Twitter. If you look at the company, it's now trading at $5 billion enterprise value. We can just go through the list, Uber, Facebook, Roblox. 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. Social networking is the use of internet-based social media platforms to make connections and share various media with friends, family, colleagues, or customers. And frankly, I was going to play some sound from you from our Delivering Alpha event last September where you called a lot of this but I don't even have to do that anymore because you just went through it. Meta layoffs 2022: Cut workforce, spending on metaverse, key investor 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. How big are the margins, ultimately Snowflake will be worth a lot more because there is almost endless demand for the product and this is a business that is highly profitable. At first glance, the rules of English capitalization seem simple. We think this is a 3X in three years even if software multiples remain at these levels near the five-year average. Market Research. In short, Meta needs to get fit and focused. 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. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. Data is a real-time snapshot *Data is delayed at least 15 minutes. Board of Directors Conclusion A Leaner, Faster, More Successful Meta. It's a better version of Messenger. It's good to see you again. March 8, 2016 I mean, we're talking about billions of dollars in revenue but you left that out. Altimeter Capital Management, - GuruFocus.com Right. Meta stock is down over 61% in 2022. I imagine they're going to be super aggressive about how they're buying back shares. JavaScript in your web browser. 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. Meta Shareholder Writes Critical Open Letter, Saying the Company Needs If the company were investing $12B per year into this project, then that confusion might not even be a problem. Investors in the round: 776 Capital, Altimeter Capital, BoxGroup, Dragoneer Investment Group, FirstMark, General Catalyst, Radcliff Group, ShawSpring Partners, SignalFire, The Baupost Group, Torch Capital, TQ Ventures This is expected to facilitate trade as the West ratchets up sanctions on Russia. Benzinga does not provide investment advice. 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. AGCUU went public at $10 on Oct. 1, and closed Tuesday at $11.80. Altimeter Capital Management is a technology focused investment firm based in Menlo Park, CA and Boston, MA. Last fall, Brad Gerstner from Altimeter Capital published an open letter, telling Meta it has "lost the confidence of investors" and telling the company to throw in the towel on its metaverse project. 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. Email. Brad Gerstner - Founder & Chief Ex.. - Altimeter Capital - ZoomInfo Tech SPAC Altimeter Growth Corp. 2 prices further upsized $400 million 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. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. Choose your reason below and click on the Report button. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. We worked hard on the deal and the timing was horrific. 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. In the back half, you've already lapped IDFA, in the back half of this year, the supply chain issues begin to ameliorate. So listen, I'm not happy about it. Reels, which is a massive product is going to increase its monetization between now and the end of the year. 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. Kevin Wang - Forbes Congrats on the new show. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. At the same time that Meta ramped up spend, you lost the confidence of investors. They may never get back to the levels at which they traded before. Australian Gold & Copper Ltd. - MarketWatch GERSTNER: Well, the first thing I would say is this, set aside SPAC. It can do great this, the business can be incredible. Contact. And I think they have to execute against the underlying operations in the business. 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. Whatever the reason, that is certainly the perception. See the Top Performing Hedge-Funds > Brad Gerstner . 2023 International Swaps and Derivatives Association, Inc. Oct 24 (Reuters) - Facebook-parent Meta Platforms Inc (META.O) needs to streamline by cutting jobs and capital expenditure, its shareholder Altimeter Capital Management said on Monday in an open letter to Chief Executive Mark Zuckerberg. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. Ray Dalio's: Bridgewater Associates. Altimeter Growth Corp., the blank-check company merging with internet giant Grab Holdings Inc., is hovering just a few cents above its record low after cratering 28% since the deal was unveiled in . Get your daily dose of business updates on WhatsApp. I don't think the Fed is going to throw away two years' worth of work to try to avoid a recession in a election year and run us straight into the teeth of a recession while we're trying to fight a war in Europe. Founder & Chief Executive Officer at Altimeter Capital . About Altimeter Capital 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. It's our largest position in the book. About Kevin Wang. 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. Why 20%? Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. 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. 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. It just launched in 150 countries, has over a billion views. 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? Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . There is no doubt that doubling annual FCF will improve share price. Learn the pros and cons of crowdfunding. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Global Business and Financial News, Stock Quotes, and Market Data and Analysis. And so for us, it's about simplification, reduction of gross and making sure that you consolidate that what you own into your highest conviction ideas whether you're playing at home in your 401k or whether you're doing this professionally. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. And Meta certainly has abundant financial resources to invest and / or return to shareholders. And what is going to be the resolution to the situation in the Ukraine? How many dogs want to eat the dog food? With SNOW currently trading at $242, that stake is now worth $8.8 billion. 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. 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. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Brad Gerstner founded the. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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%. Mar 11, 2021 3:07 PM EST. 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. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking So the way companies have to get there is by growing their top line and growing their bottom line, the answer as to all companies many most certainly will not.

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