This is a leading internet company in Southeast Asia. With that said, we have a shortage of talent in Silicon Valley. 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. If the company were investing $12B per year into this project, then that confusion might not even be a problem. "Bloomberg Opinion" columnists offer their opinions on issues in the news. 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. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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. [2] The firm focuses on technology investments in both public and private markets globally. They are people with families and kids to support. What is the rate of increase? Are you as optimistic today as you were in months past? 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. A Division of NBCUniversal. Right if the Fed raises rates 10 or 12 times given the demand destruction and the slowdown already underway in this country, we will be in a big recession come fall. 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. Altimeter manages a long / short public equity fund and private growth equity funds. effective risk management for all users of derivative products. . Tesla recalls 3,470 Model Y vehicles over loose bolts, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D'Silva, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, Exclusive: Snapchat kicks few children off app in Britain, data given to regulator shows, Exclusive news, data and analytics for financial market professionals. With all of this said, we truly believe that the company should be making some of these important investments. Bill Ackman's: Pershing Square Capital Management. 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. They may never get back to the levels at which they traded before. Link to 13F filings: SEC filings But as you know, in the first three months of this year, all the high-quality stocks are being destroyed as well. 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. Even excluding its large metaverse investment, Meta has gone from $15B in annual capex in 2018, 2019, and 2020 to $30B in annual capex in 2022. "An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards," Gerstner wrote. Altimeter and PAR believe these experienced professionals can bring meaningful experience, objective oversight, and powerful change to United. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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 nearly $40 billion and . So I am very unhappy because I've lost money on the deal. 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. 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. 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. All of China internet down over 80%. Meta changed its company name from Facebook. Neither Altimeter, nor any of its affiliates or personnel, offers investment advisory services via the internet. We're down on the year. Consumer confidence is plummeting. This is expected to facilitate trade as the West ratchets up sanctions on Russia. 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. We believe the future lies in AI. "In short, Meta needs to get fit and focused.". In the letter, Gerstner said Altimeter Capital doesn't have demands and simply wants to engage with Meta management. The full text of the stockholder letter to the United Board follows: March 8, 2016. Days Trial. 2-Year A Division of NBCUniversal. ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. Altimeter Capital owns about 2.46 million Meta shares. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward. It can do that by making. Some companies require tremendous capex investment to maintain their existing business. The conventional wisdom press and investor is that the core business hit a wall last fall. The same is true for Microsoft, right? 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We certainly are neither short-term traders nor activists. International Swaps and Derivatives Association. Moreover, I am a strong supporter of founder-led companies especially when they have your successful track record of seeing the future. It's 3 trillion, right? The changes for the Quest 2 begin Sunday, March 5. Bruce Berkowitz's: Fairholme Capital Management. ISDA 2021 SBS Top-Up Protocol, Adhering Organization: What is the Fed going to do? I mean, two years ago we were we were having this conversation. Meta said the cost of the Quest 2 will drop $70 to $429.99, while the price of the higher-end Quest Pro will be slashed to $999.99 from $1,499.99. Ro $500.0M. 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 . WAPNER: I know I know you're not happy about it. And, while most companies will struggle to monetize AI, we believe Meta is incredibly well positioned to leverage AI to make all of its existing products better. And Meta certainly has abundant financial resources to invest and / or return to shareholders. GERSTNER: Well, the first thing I would say is this, set aside SPAC. In addition, people are confused by what the metaverse even means. Focusing the Metaverse: the Next Generation of Communication and Collaboration. will trigger a new window or tab to open. Altimeter Capital Management, LLC a Portfolio Activity as reported in the most recent 13F form published on Dec 31, 2022. Altimeter is based in California and has about $16 billion in . The silver lining is that unlike many companies, this popular narrative obscures the truth. So these are different order of magnitude bets. 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. GERSTNER: No, I didn't leave it out. But you also (sometimes) capitalize the first word of a quote. Protocol: An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards. Nov. 16, 2021 at 2:38 p.m. And Meta certainly has abundant financial resources to invest and / or return to shareholders. Ranked #76 out of 483 Hedge Fund Managers. ", Medium.com. Altimeter Capital. We didn't think that was durable. Altimeter Capital launched its two SPACs in October and January, raising a combined $850 million between the two blank-check vehicles. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! I said IDFA which is the Apple changes right? Altimeter Growth Corp. 2 raised $400 million in a January IPO. 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%. Skip to main content. What am I supposed to think about that? Conforti plans to join a new firm as a co-founder with former Whale Rock Capital Management partner Kristov Paulus, said one of the people, who asked not to be identified because the information is private. "In addition, people are confused by what the metaverse even means," Gerstner wrote. No matter how a company came public in 2021, let alone December of 2021, right, they've been obliterated. 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. Remember last year they gave a guide at the beginning of the year they're going to grow at 80%. It was being purchased on the Shopify platform and people were using PayPal to check out. 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. This is a business it's grown, it's trading at 28 times free cash flow with 20% growth, that will continue to compound. These are not numbers on a spreadsheet. Sincerely, 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. He joins me live. I don't think there's any chance that the Fed is going to raise rates 10 times this year. 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. But Meta needs to get its mojo back. To put that in perspective, excluding your large metaverse investment, Meta is investing more in capex than Apple, Tesla, Twitter, Snap, and Uber combined! 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. 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. After several years of growing tensions, the potential for a reset under Australia's new Labor government is in question as trade sanctions remain and diplomatic disputes persist. Please refer to the section on cookies in our Website Privacy Policy 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. The facts are startling. We worked hard on the deal and the timing was horrific. 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. 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. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. But what is the right amount? Background [ edit] In 2008, Brad Gerstner founded Altimeter Capital in Boston, Massachusetts. We believe that our conclusion is shared by many of United's long-suffering stockholders, customers, and 80,000+ dedicated employees. ISDA fosters safe and efficient derivatives markets to facilitate 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. Meta reported in February that Reality Labs lost $13.72 billion in 2022. He said the money the company is currently spending to develop VR could add up for a decade before it comes to fruition. 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. The deal values the combined company at $35 billion and will. Two years from now, people are going to be looking back and say, why the hell didn't you buy Snowflake at 160 bucks a share? I just happen to look at a Snowflake it's in front of me and because it's your largest position, I say can Snowflake really get back to its 52-week high of $405 a share. Altimeter.com is Altimeter's only website. 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. So we're in the neighborhood of a tradable bottom. 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. 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. Of course, a company that connects nearly three billion users on phone and text must be investing in the next generation of communication. CNBC Exclusive: CNBC Transcript: Altimeter Capital Founder & CEO Brad Gerstner Speaks with CNBC's Scott Wapner on "Closing Bell: Overtime" Today Published Mon, Mar 14 20225:56 PM EDT Share. You probably know you should capitalize proper nouns and the first word of every sentence. 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. In fact, we believe that augmented and artificial intelligence has the potential to drive more economic productivity than the internet itself. The technology-focused hedge fund with a 0.1% ownership claimed that the company had lost investor confidence as it increased . "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. If you have a two-to-three-year time horizon, there is no doubt there are a lot of stocks that are going to be up well over 100% off this bottom. Capital October 20, 2022 Risk & Capital. You know how to time markets. Benzinga does not provide investment advice. The Digital Markets Act (DMA) is a groundbreaking European law designed to rein in the power of the gatekeepers of the digital economy. 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. Rodney O'Neal, former CEO of Delphi Automotive; former board member of Delphi Automotive, Sprint, and Goodyear; This company is perfectly positioned to capitalize on that they have the, the ad network to monetize it. It said Grab is expected to raise between. Round: Series D Description: Ro is a telehealth startup that operates digital health clinics for men's and women's health, along with smoking cessation. 233 South Wacker Drive 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. Over time, we intend to share with United's stockholders our detailed analysis, which has led us to conclude, among other things, that: I expected that as the world of normalized post Omicron that we would get back to the five-year average multiple. I mean you have defended it at every turn from the issues that the company has had you you defended Mark Zuckerberg, you've defended Sheryl Sandberg and you you did it quite loudly on this program. FTX's list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield,. 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. Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards". Choose your reason below and click on the Report button. And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market. Meta (Facebook) Begins Biggest Layoffs in Company's History, Meta (META) Connect Conference Key Takeaways, Meta (Facebook) Shares Slammed as Earnings, Spending Disappoint. We think this is a 3X in three years even if software multiples remain at these levels near the five-year average. +Includes DocuBay and TimesPrime Membership. So I think they got to match the investment to the revenue growth of the business. Prior to Octahedron, Ram was a partner and portfolio manager at Altimeter Capital, a multi-billion dollar investment firm . Get your daily dose of business updates on WhatsApp. 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. 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. Data is a real-time snapshot *Data is delayed at least 15 minutes. 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. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. You would simply do R&D quietly and investors would focus on the core business and the breakthroughs in AI. Altimeter Capital is in talks with ride-hailing company Grab to bring the company public in a $40 billion deal, according to a report from The Wall Street Journal. Altimeter Capital Management LP Info Size ($ in 1000's) At 12/31/2022: $3,652,571 At 09/30/2022: $4,676,285 Altimeter Capital Management LP holdings changes, total fund size, and other information presented on HoldingsChannel.com was derived from Altimeter Capital Management LP 13F filings. With that said, we have a shortage of talent in Silicon Valley. And then take that part of the world. 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). He also asked Zuckerberg to cut down on capex and employee expenses. Can it possibly be worth 200 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. 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. Portfolio Gain +273.45%. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? And I think they have to execute against the underlying operations in the business. 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. Right? Today, the cost of capital has radically changed, and so has Metas growth rate. After all, why not hire more people and invest in more things when the cost of capital was near zero and growth seemed unlimited? Frankly, if I was Sea Limited, if I was Uber, I might be looking at consolidating the business. 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. Dave Baszucki of Roblox describes the metaverse as the natural evolution of communication a multi-device world, including the phone, that is best thought of as a better version of text, video, and voice that will make us feel more connected. Trading Book: Climate Risk Scenario Analysis Close Cart 0; Reveal page search bar; ISDA fosters safe and efficient derivatives markets to facilitate effective risk management for all users of derivative products. GERSTNER: Well, first let's talk about what took Facebook down, right? To put that in perspective, it merely takes the company back to mid-2021 levels of employee expense and I dont think anybody would argue that Meta wasnt sufficiently staffed in 2021 to tackle a business that looks similar to how it looks today. Warren Buffett's: Berkshire Hathaway. This is a business it's trading at 12 times free cash flow, X the meta investment and 18 times including. . At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. He defied expectations and made profits on Priceline, Expedia, Uber, Twilio, and Hubspot. This would double annual FCF and put FCF as a percentage of revenue more in line with Google, Microsoft, and Apple. According to Hedge Follow, it was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital. 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.
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