But it's good to be here and and you know, while I think we we did see the normalization and multiples as a likely outcome toward the end of last year. The move comes amid a decline in Meta's VR shipments and pressure from activist shareholders to improve the financial picture of its metaverse division. The letter is the latest sign that Meta investors are starting to express reservations about the company's recent performance. The silver lining is that unlike many companies, this popular narrative obscures the truth. 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. On Oct. 11, Meta announced a new high-end VR headset, the Quest Pro. 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 . We certainly are neither short-term traders nor activists. At $20-$25B of annual capex, Meta will still be investing market leading amounts to help invent the future of AI. 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. We also believe Metas investment in AI will lead to exciting and important new products that can be cross-sold to billions of customers. So the way companies have to get there is by growing their top line and growing their bottom line, the answer as to all companies many most certainly will not. 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. But you also (sometimes) capitalize the first word of a quote. This is a region of 700 million plus people. Altimeter Capital Management partner Chris Conforti plans to leave the investment firm, according to people with knowledge of the matter. 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. PLAN, Access the exclusive Economic Times stories, Editorial and Expert opinion, 90 Days Prime access worth Rs999 unlocked for you, Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors, Stock analysis. How many dogs want to eat the dog food? 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. Whatever the reason, that is certainly the perception. And so that will be rolled out in Q2 and Q3. Menlo Park, CA 94025 (650) 549-9145 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies: . $6.9 M. Meta can get its mojo back, says Brad Gerstner, but it will have to take some hard decisions first. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. Some companies require tremendous capex investment to maintain their existing business. This is a company that only did 1.2 billion in revenue last year. Popular Searches. It makes no sense to me, but that is the risk that you run. At Meta, the number of employees is up over 3x from 25k to 85k employees in just the last four years! As I look at it, the market is now pricing in at least seven rate hikes. Meta has also been feeling pressure to improve the finances of its Reality Labs, the company's metaverseunit, which includes the VR headsets. It's been a big drawdown this year. committed hundreds of millions of dollars to Sequoia Capital, Altimeter Capital Management and Multicoin . In fact, in the most recent quarter, they added 1.4 billion of contracted value. Meta. 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. I have been told that Amazon spent far less in total to build AWS. We don't think we're going to have 10 rate hikes and we do think there'll be an off ramp to the situation in Ukraine. 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. Gordon Bethune, former CEO of Continental Airlines; board member of Honeywell, Prudential Financial, and Sprint; 2023 Benzinga.com. Altimeter was founded in 2008 and is headquartered out of Boston, Massachusetts. Whatever the reason, that is certainly the perception. GERSTNER: So, Scott that you know the top six names in our book are all companies that we believe are, you know, both accelerating, expanding margins, expanding free cash flow margins, right, and that are critically important and will be worth more in the future. Altimeter Capital Management, LP ("Altimeter") is an SEC-registered investment adviser. It's 3 trillion, right? 2023 CNBC LLC. In preparation for its first-ever mass tournament, Chronos will feature a fantasy-theme RPG with the potential to earn prizes and a chance to win based on the classes of playable . We also reference original research from other reputable publishers where appropriate. Altimeter Growth Corp. 2 raised $400 million in a January IPO. By any normal company or start up standard, $5 B per year would seem like an extraordinary amount. "New Prices for Meta Quest 2s 256GB SKU + Meta Quest Pro. Finally, Prudential PLC lifted its . Altimeter Capital's Brad Gerstner Issues Open Letter to Meta (NASDAQ: META) and Mark Zuckerberg. Its competitor or not its competitor, its closest comp in Southeast Asia Sea Limited is also down over 70%. Chicago, IL 60606 Privacy Policy, ISDA uses cookies to enhance your experience on our website. At the start of COVID on March 26th when I felt about like I do today, growth stocks were under assault. A letter addressed to Zuckerberg and the board of directors was published on Oct. 24. Our best guess is that maintenance capex for Meta is less than $10B annually. What is the metaverse and why are billions of dollars being spent on it? ISDA fosters safe and efficient derivatives markets to facilitate And frankly, I don't think we're gonna have hyperinflation in a world where demand is being destroyed at the rate it's currently being destroyed. Your P/E ratio has fallen from 23x to 12x and now trades at less than half the average P/E of your peers. Grab Holdings is reportedly in talks to go public through a merger with a "blank check" company that could value the Southeast Asian ride-hailing startup at as much as . Got a confidential news tip? 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. Despite public skepticism at times warranted we have been supporters As between each other Adhering Party and us, the amendments in the Appendices to the Protocol shall apply to each Protocol Covered Agreement to which we are a party in accordance with the terms of the Protocol and this Adherence Letter. The firm's private equity arm makes all-stage venture capital investments, primarily in the technology sector. 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. Get this delivered to your inbox, and more info about our products and services. 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. And Meta certainly has abundant financial resources to invest and / or return to shareholders. About Altimeter Capital Altimeter is a leading technology focused investment firm based in Silicon Valley with over $15 billion in assets from endowments, foundations, and family offices. 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. I remember people asking that question about Amazon. 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. 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. Ultimately, we and the Board necessarily must share the same objective: maximizing long-term value creation for United's stockholders, customers, and employees. Recently Active; Top Discussions; Best Content; WSO Media; BY INDUSTRY; Investment Banking ET on GuruFocus.com Builders Union LLP Buys AppLovin Corp, Match. 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. You know how to time markets. 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. Board of Directors 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. Altimeter Capital partner Kevin Wang led the firm's investment in cloud data platform Snowflake in 2015 in its $45 million Series C round; he sat on its board until 2020. Brad Gerstner SPACs notched more than $70 billion so far in 2021, a new record. I expected that as the world of normalized post Omicron that we would get back to the five-year average multiple. click here! articles a month for anyone to read, even non-subscribers! 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.