Every company I talked to is tightening its belts. Privacy Policy, ISDA uses cookies to enhance your experience on our website. 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. Brad Gerstner, Founder and CEO of Altimeter Capital; former board member of Orbitz Worldwide; "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," Gerstner wrote. ", 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%. PLAN, Yearly They're building their own ad platform, right, that can deal with this. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. Get your daily dose of business updates on WhatsApp. 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. 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. 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 . 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. 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%. Altimeter Capital Management, LLC. The conventional wisdom press and investor is that the core business hit a wall last fall. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. effective risk management for all users of derivative products. It just launched in 150 countries, has over a billion views. Some companies require tremendous capex investment to maintain their existing business. International Swaps and Derivatives Association. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. It makes no sense to me, but that is the risk that you run. See the Top Performing Hedge-Funds > Brad Gerstner . 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. But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. Regrettably, our efforts have led to our complete loss of confidence in the current Board, and to our firm determination that meaningful, stockholder-directed Board change is urgently required to serve the long-term best interests of United's stockholders, customers, and employees. 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. Altimeter Capital Management LP. 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. 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. 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. Altimeter Capital Management is an investment firm with offices in Menlo Park, CA, and Boston, MA. We certainly are neither short-term traders nor activists. Altimeter Capital owns about 2.46 million Meta shares. The facts are startling. Credit Derivatives Determinations Committees, how to enable GERSTNER: Well, first let's talk about what took Facebook down, right? But listen, there's massive uncertainty in the world. This is a hard game. And so we're getting hurt like everybody else. Can you tell me where that stands now and how you view stocks like that that have gotten absolutely obliterated? Accept. browser. Ultimately, Gerstner said, Meta has too many people and is spending too much on capital expenditures. March 8, 2016 Altimeter Capital owns approximately 0.11% of Meta. 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. If the company were investing $12B per year into this project, then that confusion might not even be a problem. All of China internet down over 80%. Is it done? . GERSTNER: Scott, I love that you asked the question. In fact, we distributed over $6 billion worth of Snowflake to our venture investors last year. 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. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. So I am very unhappy because I've lost money on the deal. Get this delivered to your inbox, and more info about our products and services. As always, happy to connect with you and your team. What Does Metaverse Mean and How Does This Virtual World Work? Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 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. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. 2023 CNBC LLC. But Meta needs to get its mojo back. 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. 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. It's interesting that now today you say we're in the neighborhood of a tradable bottom. 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. We're down on the year. In the last 18 months, Meta stock is down 55% (compared to an average of 19% for its big-tech peers). 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. 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. As you know, we are long-term shareholders. Link to 13F filings: SEC filings Global Business and Financial News, Stock Quotes, and Market Data and Analysis. The silver lining is that unlike many companies, this popular narrative obscures the truth. 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. March 2013 Protocol ALID: 66704. That's because enterprises love their product. The social media company had in June cut plans to hire engineers by at least 30%, with Zuckerberg warning employees to brace for an economic downturn. Altimeter manages a long / short public equity fund and private growth equity funds. Those three companies are all down that amount because it turns out that this year people got off their couch, they went out and they went to restaurants and they went in and did things instead of buy things. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. b***@altimeter.com. Revenue. Board of Directors We didn't think that was durable. 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. Will His AI Plans Be Any Different? The company has lost investor confidence as it ramped up spending and pivoted to the metaverse, the technology-focused hedge fund with a 0.1% stake said, and suggested a three-step plan. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. Despite public skepticism at times warranted we have been supporters We've destroyed over $15 trillion of stock market wealth. So take Snowflake as an example. The last 10 years have been a unique time in tech and for Meta. Meta shares moved 6% higher following the announcement. Capitalizing on the fund's VC success, Gerstner raised $450M for Altimeter Growth Corp (AGCUU), a blank check company IPO targeting the tech sector. Meta didn't immediately respond to a request for comment. We were about 30% to 40% depending upon which basket you looked at software internet above the five-year average. Brad Gerstner, Altimeter's chair who encouraged aggressive investment in artificial intelligence, said the firm wanted to engage with Meta and did not have any demands. [2] The firm focuses on technology investments in both public and private markets globally. It did not specify which of Alitmeter's SPACs Grab was in talks with. That could in fact become a tailwind as we get to the back half of the year. 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. JavaScript in your web browser. 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. That's why even the sell side consensus numbers have their growth rate accelerating, almost doubling between Q2 and Q4 of this year and we think it will accelerate even faster. 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