Today, the cost of capital has radically changed, and so has Metas growth rate. Founder & Chief Executive Officer at Altimeter Capital . I imagine they're going to be super aggressive about how they're buying back shares. We'll see you soon. 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 Capital's Brad Gerstner calls on Meta to slash headcount Global Business and Financial News, Stock Quotes, and Market Data and Analysis. It's my job to ask you about it knowing you're not happy about it and you answered the question. Conclusion A Leaner, Faster, More Successful Meta. Can it possibly be worth 100 billion? 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. It's been a big drawdown this year. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! So were Shopify's and so were PayPal. Market Research. 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. So I think they got to match the investment to the revenue growth of the business. 16,839 Followers. Are you as optimistic today as you were in months past? The answer to that is because people are very fearful. Investopedia does not include all offers available in the marketplace. 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. I don't think Mark did a particularly good job of explaining the meta investments. Metas core business is one of the largest and most profitable in the world with over $45 B in operating profits last year alone. Industry Trends on 4000+ Stocks, Pro Investing by Aditya Birla Sun Life Mutual Fund, Canara Robeco Equity Hybrid Fund Direct-Growth, Cut workforce, spending on metaverse, key investor tells Mark Zuckerberg. Altimeter manages a long / short public equity fund and private growth equity funds. We have $130 oil and $6 gas at the pump. Capitalizing on the fund's VC success, Gerstner raised $450M for Altimeter Growth Corp (AGCUU), a blank check company IPO targeting the tech sector. I think they have to take a look at their capital allocation plan. 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. And Meta certainly has abundant financial resources to invest and / or return to shareholders. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Grab Holdings Looking to Go Public Through SPAC Merger Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Altimeter Capital Management, LP - International Swaps and Derivatives And then take that part of the world. Meta Slashes Prices for VR Headsets Rates are going up and we have a war. The last 10 years have been a unique time in tech and for Meta. Investors Who Put $2 Billion Into FTX Face Scrutiny, Too Meta didn't immediately respond to a request for comment. 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. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. 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 . Altimeter Capital Management LP lifted its position in shares of SEA by 128.0% during the first quarter. The definitions and provisions contained in the Protocol Agreement are incorporated into this Adherence Letter, which will supplement and form part of each Protocol Covered Agreement between us and each other Adhering Party. Meta CTO Andrew Bosworth writes Facebook of old had focus in blog post What is the rate of increase? 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. 2550 Sand Hill Road, Suite 150. David Einhorn's: Greenlight Capital. Altimeter Feb 2021 - Present2 years 2 months New York, United States Chris is a Partner at Altimeter on the private investing team where he focuses on investing in iconic late stage technology. 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 This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. BRAD GERSTNER: Hey, Scott, thanks for having me. Link to 13F filings: SEC filings 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. So, its with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. In addition, people are confused by what the metaverse even means. It's our largest position in the book. Login In fact, in the most recent quarter, they added 1.4 billion of contracted value. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. Altimeter Capital Management is a technology focused investment firm based in Menlo Park, CA and Boston, MA. Altimeter Capital Management LP now owns 2,850,000 shares of the Internet company based in Singapore's stock worth $131,784,000 after purchasing an additional 1,600,000 shares during the last quarter. It's our largest position we're not selling but we acknowledge that it's been rough for our investors, rough for us. Welcome to "Overtime.". So listen, I'm not happy about it. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. All Rights Reserved. Tina Sharkey, CEO of SherpaFoundry; former board member of HomeAway; and We think this is a 3X in three years even if software multiples remain at these levels near the five-year average. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. Skip to main content. Mark Zuckerberg is a self-made billionaire and the CEO of Meta (formerly Facebook), which he co-founded in his dorm room in 2004. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! WAPNER: Let me lastly ask you about Grab, the SPAC deal you did, biggest SPAC deal ever of $40 billion. Privacy Policy, ISDA uses cookies to enhance your experience on our website. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. Instead, the company has announced investments of $1015B per year into a metaverse project that largely includes AR / VR / immersive 3D / Horizon World and that it may take 10 years to yield results. 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. 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. It lost $5.8 billion in the first six months of the year. ", Medium.com. Form of Letter Agreement between the Registrant, the Sponsor and each director and executive officer of the Registrant. It can do great this, the business can be incredible. So we're in the neighborhood of a tradable bottom. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes. Brenda Yester Baty, Head of Strategic Initiatives at Lennar Corp.; former SVP Revenue Management at Carnival Cruise Lines. Hedge Fund Manager. ALTIMETER CAPITAL MANAGEMENT, LP Top 13F Holdings - WhaleWisdom.com At the same time that Meta ramped up spend, you lost the confidence of investors. It can do that by making. Potential Choices for HF Roles from Undergrad | Wall Street Oasis Can it possibly be worth 200 billion? Tech SPAC Altimeter Growth Corp. 2 prices further upsized $400 million Activist investor Brad Gerstner, founder and CEO of tech-focusedhedge fundAltimeter Capital, sent anopen letterto CEOMark Zuckerbergin October calling for a pullback in metaverse spending. Panel led by former SC judge to include NaBFID chair KV Kamath and Infys Nandan Nilekani. It massively distorted multiples on the way in and it's massively distorting multiples on the way out. March 2013 Protocol ALID: 66704. In a single quarter, they added 1.4 billion. WAPNER: I want to take a look at the stock in "Overtime" here because I think you're moving in I'm looking at what looks to be a higher move as we're having this conversation and that brings me frankly, now to Facebook. Will His AI Plans Be Any Different? On top of that we had supply chain challenges. SCOTT WAPNER: Now let's move to an exclusive interview with a marquee investor who saw the destruction in tech coming, Altimeter Capital's founder and CEO Brad Gerstner. 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. Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, declined to comment. These are not numbers on a spreadsheet. Stock Radar: 19% from Budget Day! 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. Ro $500.0M. 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. Brad Gerstner is the Founder & Chief Executive Officer at Altimeter Capital based in Boston, Massachusetts. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. Altimeter SPAC Has Reported $40 Billion Deal for Ride-Hail Company Grab We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. Benzinga does not provide investment advice. If the deal goes through, it. If you look at the company, it's now trading at $5 billion enterprise value. Altimeter Capital - Wikipedia Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. Learn the pros and cons of crowdfunding. . We're down on the year. Crowdfunding is the use of small amounts of capital from a large number of people to raise money or fund a business. We believe in this team. 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.