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. QUARTERLY LETTER 2022 | Vol.1 1345 AVENUE OF THE AMERICA S 33RDFLOOR NEW YORK, NY 10105 HAYDENCAPITAL.COM HAYDEN CAPITAL 2 May 20, 2022 Dear Partners and Friends, The last six months have been extremely painful - by far, the worst period since we started Hayden. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. We certainly our base case, as you know, was a soft landing four to five rate hikes into this year. . +Includes DocuBay and TimesPrime Membership. We were wrong. We've destroyed over $15 trillion of stock market wealth. All rights reserved. We worked hard on the deal and the timing was horrific. This is expected to facilitate trade as the West ratchets up sanctions on Russia. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors) | by Brad Gerstner @altcap | Medium 500 Apologies, but something went wrong on our end.. Can it possibly be worth a trillion? Altimeter Capital Management, LP Meta changed its company name from Facebook. Based on yesterday's announcement, it seems the Board now agrees that for many years it operated with a suboptimal composition. Top 10 Stocks Held By Altimeter Capital Management LP I don't think they can. And what is going to be the resolution to the situation in the Ukraine? He joins me live. "Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and the Meta Board of Directors).". Meta stock is down over 61% in 2022. 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. After the pandemic, hospitals are now on a strong footing. Altimeter Capital Management, LLC - Brad Gerstner - TipRanks Altimeter Capital owns approximately 0.11% of Meta. The industry leader for online information for tax, accounting and finance professionals. Now that's what's going on in the business so all those people writing rest in peace epitaphs for Facebook are going to have to deal with that acceleration. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. Altimeter's second tech SPAC Altimeter Growth Corp. 2 files - Nasdaq Tech SPAC Altimeter Growth Corp. 2 prices further upsized $400 million Can they maintain their growth momentum? The facts are startling. You know how to time markets. 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. "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. The Meta investor recommends a plan to get the company's "mojo back.". Whatever the reason, that is certainly the perception. I'll acknowledge that Roblox and other names like that are in a much smaller, are in a much more perilous position in this market because they're not generating as much free cash as some of these other companies that I already mentioned. 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. 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. As you know, we have attempted to work collaboratively with the current Board to meaningfully improve governance, Board composition, and oversight. The same is true for Microsoft, right? committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . We have little doubt investors and others would happily support scaling up these investments as the ROI becomes more tangible even if still long-term. 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. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. 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. 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. Meta needs to regain the confidence of investors, the public and employees, Altimeter Capital Management CEO Brad Gerstner said Monday in an open letterto Zuckerberg. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? 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 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. Let me tell you the bear case on Facebook, okay, the bear case on Facebook and other ad models like Google is that we're running headlong into a massive recession. They are people with families and kids to support. 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%. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. 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. That stuff was being advertised on Instagram. They just announced that they're going to be profit, full company profitable by 2023. Meta changed its company name from Facebook to better focus on its VR hardware and software and is spending $10 billion per year on the technology. 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. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. Altimeter Capital owns a stake of about $320 million, according to the Wall Street Journal, but that only equates with a 0.1% share of the company, according to Meta's latest filings with the. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. Meta Platforms (META) shares jumped 6% after the tech giantannouncedbig price cuts for its virtual reality (VR) headsets. Altimeter manages a long / short public equity fund and private growth equity funds. 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. 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. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . Whatever the reason, that is certainly the perception. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . Chase Coleman's: Tiger Global Management. And I appreciate you being with me on the very first "Overtime" show. By Altimeter Capital $750M Venture Capital in Feb, 2021 VROOM E-Commerce +2 Total funding $1.2B in 10 rounds from 15 investors By Altimeter Capital $50M Series E in Sep, 2016 Wingz Networking +3 Total funding $13.7M in 4 rounds from 36 investors By Altimeter Capital $11M Series B in Jan, 2016 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 . Today, the cost of capital has radically changed, and so has Metas growth rate. We'll see you soon. I think that this is a business that is investing in the right things. It can do great this, the business can be incredible. 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. I hear you but look, there are, there are some people who think and it's not maybe it's not a Snowflake, but it's a you know, a basket of these kinds of names that may never get back. It's going to do 20 billion in GMV. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. 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. From Grand Teton to Universal Speech Translator to Make-A-Video, we are witnessing a Cambrian moment in AI, and Meta is no doubt well positioned to help invent and monetize that future. Meta CTO Andrew Bosworth writes Facebook of old had focus in blog post And Meta certainly has abundant financial resources to invest and / or return to shareholders. As always, we welcome the opportunity to engage in further discussions focused on this shared objective. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. 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. Learn the pros and cons of crowdfunding. Read More . Benzinga does not provide investment advice. The stock today hit a new low under $3. I have spent over 20 years investing behind some of the worlds great founders who are helping to invent the technologies that move the world forward. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. It was being purchased on the Shopify platform and people were using PayPal to check out. Southeast Asia's Grab in talks for U.S. listing via $40 billion SPAC 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. Brad, thank you. But you also (sometimes) capitalize the first word of a quote. Congrats on the new show. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. Enjoy a 7-Day Free Trial Thru Feb 17, 2023! Usually you don't capitalize after a colon, but there are exceptions. On top of that we had supply chain challenges. 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. 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. 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. Finally, Prudential PLC lifted its . It is a poorly kept secret in Silicon Valley that companies ranging from Google to Meta to Twitter to Uber could achieve similar levels of revenue with far fewer people. Skip to main content. 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. To set a new and better course for the Company, and to give United stockholders the opportunity to elect the Board they deserve, Altimeter has delivered to you a notice today indicating its intention to nominate six highly qualified professionals led by former Continental Airlines CEO Gordon Bethune to the United Board at the 2016 annual stockholder meeting. CAPEX Investing Aggressively and Responsibly in the Future of AI. 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. 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. Email. 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. The Wall Street Journal reported on Thursday that Grab was in talks with Altimeter. 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. Founder & Chief Executive Officer at Altimeter Capital . It has 24 billion in free cash they're going to generate this year. 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. 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. Days Trial Investopedia does not include all offers available in the marketplace. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. But the fact of the matter is the entire market has evaporated around these types of stocks. PLAN, Yearly Rapid mobile adoption helped market leaders blaze through the s-curve with astounding growth rates and a historically low cost of capital made investments in people and things the rational economic decision. FalconX Raises $210M Following 30x YoY Revenue Growth; Now Valued at $3.75 Billion Series C Led by Altimeter Capital, B Capital Group, Sapphire Ventures, and Tiger Global Management, with. I have been told that Amazon spent far less in total to build AWS. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. This letter constitutes, as between each other Adhering Party and us, an Adherence Letter as referred to in the Protocol. 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. This is a company that only did 1.2 billion in revenue last year. At the end of the second quarter this year, Altimeter Capital held more than 2 million shares of Meta. Grab to list in US via $40 bln merger with Altimeter Growth Please refer to the section on cookies in our Website Privacy Policy GERSTNER: Scott, I love that you asked the question. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. 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. Brad Gerstner's Altimeter Capital Management has between $300 million and $400 million in assets under management, and invests almost exclusively in the services sector. It's been a half century since Australia and China established formal relations, but neither side is really celebrating. So these are different order of magnitude bets. Over the last three years, Meta has also dramatically increased its capital expenses. Altimeter Capital's Brad Gerstner calls on Meta to slash headcount HONG KONG (AP) Southeast Asia's largest ride-hailing company, Grab Holdings, said Tuesday that it plans to merge with U.S.-based Altimeter Growth Capital in a deal that would value it at . Sign up for free newsletters and get more CNBC delivered to your inbox. 2023 International Swaps and Derivatives Association, Inc. Get your daily dose of business updates on WhatsApp. About Altimeter Capital Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019. Remember last year they gave a guide at the beginning of the year they're going to grow at 80%. Those decisions include slashing expenditure and reducing headcount, the CEO of Altimeter Capital told Meta founder Mark Zuckerberg in an open letter. See the Top Performing Hedge-Funds > Brad Gerstner . So, it doesn't surprise me at all that buyers are on the sidelines and that sellers and short sellers are having a field day with stocks. Following careful consideration, we have firmly concluded that meaningful change to United's existing Board of Directors is urgently required in order to reverse long-standing poor Board governance and the resulting many years of substantial and inexcusable Company underperformance relative to United's competitors. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! Brad Gerstner founded the. Includes DocuBay and TimesPrime Membership. for a description of how we use cookies. The full text of the stockholder letter to the United Board follows: March 8, 2016. Altimeter SPACs surge on reported $40 billion deal for Singapore ride Further strengthening our own conclusions, your seemingly desperate actions yesterday appear as a transparent and cynical attempt to maintain your official privileges and power, despite your long historical record of deficient oversight on behalf of stockholders. effective risk management for all users of derivative products. Why didn't you buy, you know, Uber at 28 bucks a share? When you look at these questions, it comes down to this. 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. Ranked #76 out of 483 Hedge Fund Managers. Home : Altimeter August 2012 Protocol ALID: 66703 SEC.gov | HOME At the end of the second. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: 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. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. Before we we move, what do I do with Facebook? 10. 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. Board of Directors c/o Chairman Henry L. Meyer III United Continental Holdings, Inc. . "Meta Reports Fourth Quarter and Full Year 2022 Results," Page 10. Why 20%? The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. Altimeter is focused on technology investment, and has found multi-billion-dollar success. The last 10 years have been a unique time in tech and for Meta. FTX's Bankman-Fried Quietly Invested More than $500 Million in Sequoia Our Standards: The Thomson Reuters Trust Principles. Investors Who Put $2 Billion Into FTX Face Scrutiny, Too Q1 2021: 13 Largest Global Startup Funding Rounds - AlleyWatch So were Shopify's and so were PayPal. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! CAPEX Investing Aggressively and Responsibly in the Future of AI. Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Stock Traders Are Ignoring Blaring Bond Alarms, iPhone Maker Plans $700 Million India Plant in Shift From China, Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War. We think both of those are solvable. It's my job to ask you about it knowing you're not happy about it and you answered the question. Altimeter.com is Altimeter's only website. Sincerely, With the gains posted on March 3, Meta Platforms shares are up 54% this year. We know they have high EBITDA margins on the rideshare business which is dominant across the region. It's also a vote of less confidence about the company's ambitions in the world of virtual and augmented reality. Grab Holdings Looking to Go Public Through SPAC Merger 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. Time to Get Fit an Open Letter from Altimeter to Mark Zuckerberg (and Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. The firm also considers investments in the consumer products and services, gaming, retail, and transportation sectors. We simply wanted to further engage and continue sharing our thoughts as an interested shareholder. 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. ISDA fosters safe and efficient derivatives markets to facilitate
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