Meta Poaches A Rival CEO & Costco’s Membership Problem

John Creteau (0:00)

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SpaceX successfully launches Starship into orbit for the first time. We explore why all eyes are on the payload.

Emily Milliron (0:41)

And Meta just poached a rival CEO. We have the latest on Zuckerberg's new vision for its AI product.

John Creteau (0:47)

From Monday, September 28th, it's Brew Markets Daily. I'm John Creteau.

Emily Milliron (0:50)

I'm Emily Milliron. Let's get move in and groove in.

John Creteau (1:00)

All right, Emily, very happy to have you in studio to kick off the week. In a moment, I think you and I are going to bond over some Costco tales and the company's latest earnings. But first, all's fair in love and corporate warfare, because today we learned that the CEO of MongoDB quit. Effective immediately to go run a brand-new division at Meta. More of that in a moment.

Shares of the MongoDB immediately fell 20%, wiping out nearly $6 billion in market cap. What is MongoDB? Well, apparently Mongo is short for humongous. DB, of course, is short for database. So it's a humongous database where a chunk of internet apps store and organize their data. The company went public just 10 years ago and was on pace to bring in $3 billion this year in revenue.

All right, so a few days ago, definitely not the two week notice we typically give our employers. Mongo CEO CJ Desai notified the board that he was resigning as president and CEO effective today. He'd only been on the job since November, Emily, 10 months in the top seat.

Emily Milliron (2:04)

Yeah, John, the company's filing with the SEC made it clear he was not pushed out. With the statement, Mr. Desai's decision to resign is not due to any disagreement with the company or any matter relating to the company's operations, policies or practices. So he wasn't pushed out, he was pulled out. Because before MongoDB, Desai was president of product and engineering at CloudFair. And before that, he spent almost eight years at ServiceNow, eventually serving as president and CEO. So he has quite the resume. So he has a background in enterprise software and security.

John Creteau (2:38)

That's right, the enterprise part. And his new title starting today is Chief Enterprise Platform Officer at Meta, which is a brand new title and a brand new division for Meta. Meta CEO Mark Zuckerberg announced it today by saying, quote, we're starting the next major pillar of our new business, Meta Enterprise Platform to help businesses use AI to grow and transform in new ways.

Emily Milliron (3:01)

So basically Meta, which has spent 20 years selling ads next to your vacation photos, is looking to target business clients. Last week, all the buzz was about the success of Meta's new personal AI agent, Muse, which we've talked about on this show. And while now Meta is expanding Muse with an API version, along with a coding tool called Muse Code. This finally puts Meta in the same ring to compete with Microsoft, Google, OpenAI, and Anthropic for corporate AI dollars.

John Creteau (3:27)

Emily, does this public poaching feel like a familiar move for Meta?

Emily Milliron (3:31)

It really does. Obviously we have to cover this company for our job, right? But they have a track record of splashy announcements that don't necessarily pay off. If you look at the Metaverse, they start with the poached, but not sure they have the organization in place to really further this along. If you take a deeper look at the Metaverse, for example, since 2020, it's lost more than $85 billion and it's led to tens of thousands of layoffs.

John Creteau (3:54)

Right. Today, shares of Meta are down 3%.

They were down another 3% last Friday. Still, they've been up 30% in September, but there's two storylines weighing on shares as of late. A BNP analyst issued a note today saying that Muse is expected to monetize throughout small transaction fees, but we believe long-term monetization remains a question mark for investors. So we've got that revenue trickling in, but it might not be a juggernaut. So the initial excitement of the agent topping the charts in the app store might be waning. And generally, there's a broader pressure on AI-related stocks today after OpenAI announced it has halted training of its latest models, saying it will resume training, only when we are confident that we have additional safeguards in place.