Founder & Chief Executive Officer at Altimeter Capital . 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. articles a month for anyone to read, even non-subscribers! He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. 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Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. 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 annual investment in the metaverse to $5 billion instead of the current $10 billion. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. This is a company that only did 1.2 billion in revenue last year. There are a lot of companies with speculative business models, right, that are should have never been valued where they were valued and if you don't have absolute conviction, right, they can grow their product, grow their top line and grow their earnings to match where those earlier prices were, then you need to rotate those dollars out of those companies and into companies where you have that level of conviction. Some companies require tremendous capex investment to maintain their existing business. 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). Altimeter Capital launched its two SPACs in October and January, raising a combined $850 million between the two blank-check vehicles. 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. Whatever the reason, that is certainly the perception. They were cratering ironically, now we're normalizing and growth stocks are down even more than they were at the start of COVID. In our view given United's valuable and industry-leading strategic asset base this long-term underperformance directly results from an underqualified, ineffective, complacent, and entrenched Board. The Meta investor recommends a plan to get the company's "mojo back.". ", 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%. ALTIMETER CAPITAL MANAGEMENT, LP Top 13F Holdings - WhaleWisdom.com And Meta certainly has abundant financial resources to invest and / or return to shareholders. for a description of how we use cookies. Can it possibly be worth 100 billion? Think about this, Scott. Musk Made a Mess at Twitter. As such, we would encourage the company to move aggressively and cut at least 20% of employee-related expenses by January 1, 2023. If Meta was able to control those costs, he said, then it could double its free cash flow and improve its share price. Get this delivered to your inbox, and more info about our products and services. 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. Can it possibly be worth a trillion? ", Medium.com. This company is perfectly positioned to capitalize on that they have the, the ad network to monetize it. But listen, there's massive uncertainty in the world. 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 . 'Super-Sized and Terrifying': Zuckerberg's $100B Metaverse Gamble And, while that ultimately is an important long-term measure of success for all of Metas stakeholders, it would be imprudent to make short-term bad decisions just to improve the share price. GERSTNER: So let's talk for a second about what I called. SPACs notched more than $70 billion so far in 2021, a new record. So I am very unhappy because I've lost money on the deal. United Urgently Needs a Course Correction: United's stockholders, customers, and employees deserve better Board governance, better Board leadership, and better Board performance. 2499 1749, Monthly Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. As always, happy to connect with you and your team. The Singaporean rideshare giant Grab is set to merge with the SPAC Altimeter Growth 1, according to a report from The Financial Times. These include white papers, government data, original reporting, and interviews with industry experts. GERSTNER: Without a doubt the single biggest lever on growth multiples is rates. 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. 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. "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. 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. And then take that part of the world. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Altimeter LLC. 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. I have deep respect and admiration for founders that continue to grind, inspire, and invent long after the financial motivation is gone. We certainly our base case, as you know, was a soft landing four to five rate hikes into this year. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. It lost $5.8 billion in the first six months of the year. 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. Focusing the Metaverse: the Next Generation of Communication and Collaboration. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Following is the unofficial transcript of a CNBC exclusive interview with Altimeter Capital Founder & CEO Brad Gerstner on CNBC's "Closing Bell: Overtime" (M-F, 4PM-5PM ET) today, Monday, March 14th for the premiere. You got a lot of this right but multiples have come down a heck of a lot to this point. Digital Markets Act (DMA): How the EU Law Will Work, Mark Zuckerberg: Founder and CEO of Meta (formerly Facebook), Crowdfunding: What It Is, How It Works, Popular Websites, FTX: An Overview of the Exchange and Its Collapse, New Prices for Meta Quest 2s 256GB SKU + Meta Quest Pro, Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors), Meta Reports Fourth Quarter and Full Year 2022 Results. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (META) and FTX founder Sam Bankman-Fried was not only a tireless fundraiser from venture capital firms including Paradigm and Sequoia Capital, but also quietly made investments in those same funds, according to two people familiar with the matter. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. The metaverse is a shared virtual environment with aspects of online gaming, augmented reality, and more that people can access via the Internet. For reprint rights: Continue reading with one of these options: Login to get access to some exclusive stories, Get access to exclusive stories, expert opinions &, Valid only with UPI, Credit & Debit Cards Autopay, Inciting hatred against a certain community, 15 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. He argued that this was "one of the big reasons behind these price cuts.". What Does Metaverse Mean and How Does This Virtual World Work? Benchmark Reform and Transition from LIBOR InfoHub, Use of Chinese Government Bonds as Margin, Updated OTC Derivatives Compliance Calendar, ISDA-Clarus RFR Adoption Indicator: January 2023. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. They are people with families and kids to support. 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 . "An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards," Gerstner wrote. 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. We did not see this talk of 10 rate hikes and we certainly didn't see a war developing in Europe. Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019. Altimeter Capital Management, LP Buys Opendoor Technologies Inc, Toast Inc, Duolingo Inc, Sells . What do you think? The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; Days Trial By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Chief Executive Officer In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself.
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