Speaker 1: This is what the Flux.
Speaker 2: I'm Brander Justin and at Monday, the twenty second of July,
Speaker 2: Dozzy boy.
Speaker 1: New jobs data was released late last week and the
Speaker 1: jobs market is still relatively tight. It scurried its way
Speaker 1: from four percent unemployment to just four point one percent,
Speaker 1: and that means a slightly higher likelihood that next month's
Speaker 1: Reserve Bank meeting could mean another cash rate rise. Bookieh
Speaker 1: Spookie stuff, Fluxlam.
Speaker 2: It's the time of the year where everybody is worried
Speaker 2: about their tax return? How do I do it? When
Speaker 2: do I submit it? How much money am I gonting
Speaker 2: at back? That's why we built the Flux tax took
Speaker 2: it within the Academy this month. Make sure you head
Speaker 2: to the Flux app and check out the academy.
Speaker 1: Three balance worthy stories today, Dozzy boy, let's do it
Speaker 1: for our first four. Eskew Metals Group, one of Australia's
Speaker 1: largest companies, has cut seven hundred jobs across its global
Speaker 1: workforce after its green ambitions haven't quite met investor expectation.
Speaker 2: Sounds like all that green hydrogen talk might not have
Speaker 2: been all it was chalked up to be. So what
Speaker 2: is the story here?
Speaker 1: Well, juzzy Boy. Fortescue is the mining giant that was
Speaker 1: founded by Andrew Twiggy twig Man Forest back in two
Speaker 1: thousand and three.
Speaker 2: It's since become the fourth largest iron ore producer globally,
Speaker 2: with a marker cap of a wappen sixty seven billion dollars.
Speaker 1: But dose the boy. Interestingly, Fordescue is also at the
Speaker 1: forefront of developing green hydrogen technology.
Speaker 2: Yep, it's set some pretty lotty goals to achieve it
Speaker 2: net zero by twenty thirty. But now Fortescue has just
Speaker 2: announced that it'll be acting seven hundred jobs globally and
Speaker 2: restructuring its business. And not just that being man, it's
Speaker 2: also scaling back it's green hydrogen initiatives because of high
Speaker 2: energy prices.
Speaker 1: You mean, the same green hydrogen initiatives that it's been
Speaker 1: raving about since twenty twenty.
Speaker 2: Yep, the very same, which is why Fortescue is highlighted
Speaker 2: a number of times that it has no plans to
Speaker 2: actually abandon these green hydrogen initiatives.
Speaker 1: But there's still a lot of questions in the air
Speaker 1: about whether Fordescue's investment in this new technology will actually
Speaker 1: reap any results.
Speaker 2: So what is the key learning here.
Speaker 1: When a company chooses to innovate with new technology, it
Speaker 1: needs to balance current shareholder value with long term growth potential.
Speaker 2: We know that a company is obligated to a shareholder
Speaker 2: aka the people who put money into the business.
Speaker 1: So if a company wants to mix things up and
Speaker 1: do something a little bit different, it needs to sell
Speaker 1: the vision to shareholders successfully and be man.
Speaker 2: That's not always easy because investing innovation is inherently experimental
Speaker 2: and very risky.
Speaker 1: There is just no promise that it's going to pay off.
Speaker 2: Yeah, there's large upfront costs, there's a tension pulled away
Speaker 2: from the core business as well.
Speaker 1: In fordes Us case, it's green hydrogen initiative has accumulated
Speaker 1: over two billion dollars in losses. That's so far, and.
Speaker 2: While cutting edge technology that tackles climate change sounds exciting,
Speaker 2: shareholders are only willing to wait so long to see
Speaker 2: results from new initiatives. For our second story, Microsoft has
Speaker 2: announced a new AI powered designer app late last week
Speaker 2: to help newbies with their basic design skill.
Speaker 1: This sounds real, can for dup. If you ask me,
Speaker 1: juzzy boy, tell me everything you know.
Speaker 2: Okay, So Microsoft is obviously the behemoth tech company started
Speaker 2: back in nineteen seventy five and has grown to a
Speaker 2: three point three trillion US dollar valuation.
Speaker 1: We'd be talking about the second largest company in the
Speaker 1: whole down universe based on market value.
Speaker 2: Man. Although Microsoft has made some updates to its offer
Speaker 2: suite over the years, let's be honest, they haven't been great.
Speaker 1: Yep. PowerPoint praises still feel like they're from nineteen ninety eight.
Speaker 2: So now Microsoft has announced a new AI powered app.
Speaker 2: It's called wait for it, Designer every original name. It
Speaker 2: can give you prompt templates to help kickstart the creative process.
Speaker 2: Let's be honest, no one knows how to design and
Speaker 2: give away post from scratch.
Speaker 1: But boy, if you're thinking that it sounds awfully similar
Speaker 1: to the c dog Ie Canvas, you would be right.
Speaker 1: I was thinking that, actually, except Microsoft has one little
Speaker 1: leg up on Canvas. It has a partnership with open Ai,
Speaker 1: so there's a lot of AI in this tool too, And.
Speaker 2: All of a sudden, Canvas may just have a big,
Speaker 2: bad competitor in the design market.
Speaker 1: Ooh, you went there. So what is the key learning here?
Speaker 2: The hunter has become the hunted.
Speaker 1: Over the past eleven years, Canvas identified a major gap
Speaker 1: in the design market and grew from plucky upstart to
Speaker 1: establish a leader of design software.
Speaker 2: It was hunting down the design software market from Microsoft
Speaker 2: and Adobe's Photoshop.
Speaker 1: But after their rapid growth, they find themselves as the
Speaker 1: company being hunted by Microsoft.
Speaker 2: And be Man. When a tech leader rolls out a
Speaker 2: new product into an existing offering, it has an enormous
Speaker 2: strategic advantage distribution.
Speaker 1: In fact, Microsoft already has more than one point five
Speaker 1: billion Office sweet users around the globe.
Speaker 2: Compare that to Canvas one hundred and seventy million users and.
Speaker 1: Jesi boy this saying the first time we've seen a
Speaker 1: global tech giant with massive distribution dupe another company's product
Speaker 1: and make it into a feature.
Speaker 2: For example, Garman and Tom Tom they were the leaders
Speaker 2: in GPS mapping until Google and Apple made it an
Speaker 2: app in their phones.
Speaker 1: What about Adobe? They were the leader in the PDF
Speaker 1: format until Microsoft created their own PDF viewer in the Office.
Speaker 2: Suite, so be Man. Only time will tell if Canva
Speaker 2: can maintain its design market dominance.
Speaker 1: For our third and final story, the maker of ray
Speaker 1: Ban Sonny's esselaw Laxotica, has acquired the Supreme Fashion brand
Speaker 1: for one point five billion US dollarydo the.
Speaker 2: Old Sunny's and streetwear colob I can kind of see
Speaker 2: it working. Tell me all a bit of boutground here,
Speaker 2: Juzzy boys. So, Eslor Luxotica is the merged company of
Speaker 2: Luxotica from Italy and Essloor from France. Fun fact for you,
Speaker 2: Eslo Lexotica pretty much owns all of the big eyewear
Speaker 2: brands around the world.
Speaker 1: We'd be talking ray Band Oakley, you're a per sol man,
Speaker 1: and don't forget Sunglass Heart.
Speaker 2: I've seen you in there a few times. That's the
Speaker 2: Sunny's retailer and they've got over fifty two percent market
Speaker 2: share in the eyewear industry.
Speaker 1: Now, Juzzy boy, it must have come as a bit
Speaker 1: of a surprise for you when they made a big
Speaker 1: announcement late last week.
Speaker 2: Eslo Luxotica announced it will acquire the streetwear brand Supreme
Speaker 2: from VF Brands for one and a half billion US dollars.
Speaker 2: That would be the on trend sweetwear brand that many
Speaker 2: celebs rock in the papped shots around town. And interestingly,
Speaker 2: this is Esla Luxotika's first acquisition of an apparel company.
Speaker 1: Yeah, it would seem that they want to acquire Supremes
Speaker 1: platform and connect to Supreme's audience, which is primarily gen Z.
Speaker 2: And while the share price of Supreme's owner jumped eight percent,
Speaker 2: the shares in Eslo Luxotica dropped.
Speaker 1: Nearly four mainly because many investors are unsure about the
Speaker 1: strategic fit of a streetwear brand in a luxury eyewear company.
Speaker 2: So what is the key learning here?
Speaker 1: A strategic fit is when an acquiring company can benefit
Speaker 1: from synergies with the acquired company.
Speaker 2: So Eslo Lexotica is trying to leverage Supreme brand equity
Speaker 2: to not only grow the brand further, but also make
Speaker 2: their eyewear cool again.
Speaker 1: And while all of this makes sense in theory, doesn't
Speaker 1: always work out in brattice.
Speaker 2: Remember when will Worth acquired dick Smith for four hundred
Speaker 2: and thirty million bucks.
Speaker 1: And it ended up selling dick Smith to a private
Speaker 1: equity firm for just twenty million bucks.
Speaker 2: So esltt Lexotica will be hoping it can successfully leverage
Speaker 2: its retail experience in starting to sell Fyfe Culture clothes
Speaker 2: to gen Z flux Am. The sooner you is to
Speaker 2: bit your tax returns, the sooner you can potentially get
Speaker 2: your tax rebite. We've got it all covered in the
Speaker 2: Flux Academy. This month the FI twenty four tax Toolkits.
Speaker 2: Make sure to check it out.
Speaker 1: Thanks for listening, and we'll see you on Wednesday.