1 00:00:05,160 --> 00:00:07,440 Speaker 1: This city is what the flux. I'm Brett and I'm 2 00:00:07,600 --> 00:00:10,000 Speaker 1: justin and it's Wednesday, the tenth of February. Jessy boy. 3 00:00:10,039 --> 00:00:12,080 Speaker 2: The Big four banks could very well become the Big 4 00:00:12,200 --> 00:00:15,360 Speaker 2: five soon. Mcquarie Group has laid out some pretty bold 5 00:00:15,440 --> 00:00:19,280 Speaker 2: ambitions to grow its deposit and lending business. Interesting December alone, 6 00:00:19,400 --> 00:00:22,360 Speaker 2: Mcquarie's deposit growth was two point six times the level 7 00:00:22,400 --> 00:00:25,120 Speaker 2: of all banks, and its lending book is growing as well. 8 00:00:25,280 --> 00:00:28,240 Speaker 1: Your move. Big four just quietly CBA shaking in their 9 00:00:28,400 --> 00:00:30,880 Speaker 1: yellow booties. M fox Am. We all know that the 10 00:00:30,880 --> 00:00:32,680 Speaker 1: share markets have been going up, they've been going down, 11 00:00:32,720 --> 00:00:34,560 Speaker 1: and there's a hell of a lot of market volatility 12 00:00:34,560 --> 00:00:36,040 Speaker 1: at the moment. It can feel a little bit like 13 00:00:36,040 --> 00:00:38,159 Speaker 1: turbulence in the middle of a relaxing flight. That's why 14 00:00:38,200 --> 00:00:40,280 Speaker 1: in the Flex app today, we've broken down some of 15 00:00:40,320 --> 00:00:42,560 Speaker 1: the different asset classes that you can invest in that 16 00:00:42,680 --> 00:00:44,800 Speaker 1: can smooth out that turbulence. So if you want to 17 00:00:44,840 --> 00:00:46,879 Speaker 1: learn more about a range of different asset classes, make 18 00:00:46,920 --> 00:00:48,800 Speaker 1: sure to download the Flex app and check it out. 19 00:00:48,880 --> 00:00:51,479 Speaker 2: Three delightful stories today, Dozi boy, Let's do it for 20 00:00:51,640 --> 00:00:55,000 Speaker 2: our first Seek has written down its investment in Chinese 21 00:00:55,080 --> 00:00:58,160 Speaker 2: jobs portal Jaopin by three hundred and sixty five million 22 00:00:58,200 --> 00:00:59,800 Speaker 2: dollars after the company's poor. 23 00:00:59,640 --> 00:01:02,280 Speaker 1: Performed Believe they've been toot in japins horned for a 24 00:01:02,280 --> 00:01:04,360 Speaker 1: little while be Man. So that's a bit disappointing. What's 25 00:01:04,440 --> 00:01:05,360 Speaker 1: going on here? All right? 26 00:01:05,400 --> 00:01:08,280 Speaker 2: So sikh is obviously a massive online jobs board for 27 00:01:08,319 --> 00:01:11,040 Speaker 2: the age specific region that's been around since nineteen ninety seven. 28 00:01:11,280 --> 00:01:13,880 Speaker 1: And get this, last financial year they processed over fifty 29 00:01:13,880 --> 00:01:17,679 Speaker 1: eight million applications every month. That's about ten times the 30 00:01:17,720 --> 00:01:20,400 Speaker 1: population of Sydney. But bee Man Seek doesn't just run 31 00:01:20,440 --> 00:01:23,440 Speaker 1: these job boards. It also invests in job boards around 32 00:01:23,440 --> 00:01:24,200 Speaker 1: the world. 33 00:01:24,120 --> 00:01:26,560 Speaker 2: Like when they had a more than sixty percent steak 34 00:01:26,600 --> 00:01:28,520 Speaker 2: in Chinese jobs board Jaopin. 35 00:01:28,680 --> 00:01:31,440 Speaker 1: But be Man COVID hit China's economy and job market 36 00:01:31,440 --> 00:01:33,760 Speaker 1: hard and it's been pretty sluggish ever since. 37 00:01:34,000 --> 00:01:36,200 Speaker 2: So while Seeks sold down to just under twenty five 38 00:01:36,200 --> 00:01:38,720 Speaker 2: percent steak, now it was time for Sek to take 39 00:01:38,760 --> 00:01:40,640 Speaker 2: a good hard look at the numbers again. 40 00:01:40,800 --> 00:01:43,440 Speaker 1: Yep. Two years ago, Seeks slashed one hundred and forty 41 00:01:43,480 --> 00:01:46,399 Speaker 1: million dollars off Jaopin's value because of their slow growth 42 00:01:46,440 --> 00:01:49,280 Speaker 1: and pressure from competitors, And now another three hundred and 43 00:01:49,320 --> 00:01:51,760 Speaker 1: sixty five million dollars has been written off for the 44 00:01:51,760 --> 00:01:54,400 Speaker 1: same reason. Ouch, that's more than two thirds of Seek's 45 00:01:54,440 --> 00:01:56,440 Speaker 1: investment value gone just like. 46 00:01:56,440 --> 00:01:59,760 Speaker 2: That, Yaikaruni's. These impairments have really got a hurt Seek. 47 00:02:00,120 --> 00:02:01,320 Speaker 1: So what is the key learning here? 48 00:02:01,400 --> 00:02:04,400 Speaker 2: And impairment is when a company reduces the reported value 49 00:02:04,480 --> 00:02:07,240 Speaker 2: of an asset because it's worth less than what's on 50 00:02:07,280 --> 00:02:07,720 Speaker 2: the books. 51 00:02:07,800 --> 00:02:10,680 Speaker 1: It's basically a reality check for a company. Huh. And 52 00:02:10,680 --> 00:02:14,079 Speaker 1: that's exactly what happened with jaopin Man One. Impairment is rough. 53 00:02:14,160 --> 00:02:17,200 Speaker 1: When the same asset keeps getting devalued, it usually points 54 00:02:17,200 --> 00:02:18,359 Speaker 1: to a bit of a deeper problem. 55 00:02:18,680 --> 00:02:23,040 Speaker 2: It's giving long term challenges. Then, aren't going away anytime soon, vibes. 56 00:02:23,160 --> 00:02:25,560 Speaker 1: And we've seen this patterned play out before be Man yep. 57 00:02:25,560 --> 00:02:28,800 Speaker 2: In twenty fourteen, Telstra was forced to devalue Census, the 58 00:02:28,840 --> 00:02:30,760 Speaker 2: company behind yellow and white pages. 59 00:02:30,840 --> 00:02:33,400 Speaker 1: Yeah, it was originally expected that Census would be valued 60 00:02:33,400 --> 00:02:36,600 Speaker 1: between ten to twelve billion dollars, but the business kept 61 00:02:36,639 --> 00:02:39,639 Speaker 1: getting revalued and impaired. Once it was more or less 62 00:02:39,680 --> 00:02:42,839 Speaker 1: replaced by Google. Telstra eventually exited Census for just over 63 00:02:42,880 --> 00:02:46,200 Speaker 1: four hundred and fifty million dollars through a pretty disappointing Zeller. 64 00:02:46,280 --> 00:02:49,000 Speaker 2: So Jose, boy, it looks like history could be repeating itself. 65 00:02:48,680 --> 00:02:51,600 Speaker 1: And if conditions in China don't improve soon, Jaopin could 66 00:02:51,639 --> 00:02:54,639 Speaker 1: turn out to be a far heavier impairment and seek bargain. 67 00:02:54,320 --> 00:02:57,840 Speaker 2: For For our second story, Stillantis, the owner of Jeep 68 00:02:57,880 --> 00:03:00,880 Speaker 2: and Chrysler, has seen it shares plummet thirty percent after 69 00:03:00,919 --> 00:03:03,799 Speaker 2: its mega investment in electric vehicles failed to pay off. 70 00:03:03,840 --> 00:03:07,280 Speaker 1: Well, well, well, looks like the electric future for Stilantis 71 00:03:07,480 --> 00:03:09,720 Speaker 1: just run out of charge, So tell me more so. 72 00:03:09,840 --> 00:03:12,440 Speaker 2: Stilantis is the global car giant that was formed in 73 00:03:12,520 --> 00:03:15,040 Speaker 2: twenty twenty one from the merger of Fiat Chrysler and 74 00:03:15,200 --> 00:03:17,799 Speaker 2: PSA Group. Basically, if it has four wheels and an 75 00:03:17,800 --> 00:03:21,440 Speaker 2: aggressive ad voiceover, Stalantis probably owns it. 76 00:03:21,600 --> 00:03:24,920 Speaker 1: We've been talking Jeep and Chrysler, Pugo, Ram, Dodge and 77 00:03:25,000 --> 00:03:27,359 Speaker 1: many others as well. Hi does you boy? 78 00:03:27,520 --> 00:03:30,480 Speaker 2: Stilanda's just announced a right down of over twenty six 79 00:03:30,560 --> 00:03:32,640 Speaker 2: billion US dollars and that is billion with a B. 80 00:03:32,960 --> 00:03:35,360 Speaker 1: You se b man. Back in twenty twenty one, Stilantis 81 00:03:35,360 --> 00:03:38,119 Speaker 1: announced a big push into the electric vehicle. 82 00:03:37,880 --> 00:03:41,080 Speaker 2: Market, which sounds great until the CEO admits they overestimated 83 00:03:41,080 --> 00:03:43,160 Speaker 2: the pace of the energy transition. 84 00:03:42,840 --> 00:03:44,800 Speaker 1: And now it's going to cost them twenty six billion 85 00:03:44,880 --> 00:03:47,480 Speaker 1: US dollars in ride offs and cash payments are canceled 86 00:03:47,480 --> 00:03:50,280 Speaker 1: EV products, as well as the costs of downsizing its 87 00:03:50,320 --> 00:03:53,680 Speaker 1: EV supply chain. So now Stilantis is doing a full blown, 88 00:03:53,720 --> 00:03:56,480 Speaker 1: as they call it reset. Yep, it's announced a plan 89 00:03:56,600 --> 00:04:01,840 Speaker 1: to pivot back to hybrids and traditional combustion engine But Solantis' investors, 90 00:04:01,880 --> 00:04:04,080 Speaker 1: after hearing this news were not in a forgiving mood. 91 00:04:04,120 --> 00:04:07,240 Speaker 1: It's share price dropped by thirty percent. So what is 92 00:04:07,280 --> 00:04:11,600 Speaker 1: the dodge key learning here? Businesses that overinvest based on 93 00:04:11,720 --> 00:04:16,039 Speaker 1: regulatory momentum risk getting caught if and when the politics change. 94 00:04:16,080 --> 00:04:16,920 Speaker 1: You see Judge boy In. 95 00:04:16,960 --> 00:04:19,400 Speaker 2: Many car makers bet big on evs when the Biden 96 00:04:19,480 --> 00:04:22,680 Speaker 2: administration brought in strict environmental regulations. 97 00:04:22,720 --> 00:04:25,279 Speaker 1: There were new fuel emission standards. 98 00:04:24,880 --> 00:04:26,960 Speaker 2: Goals that fifty percent of cars would be EV's by 99 00:04:27,000 --> 00:04:30,560 Speaker 2: twenty thirty. But then the Trump administration rolled back many 100 00:04:30,640 --> 00:04:33,200 Speaker 2: of those emission rules, as well as the financial support 101 00:04:33,240 --> 00:04:34,560 Speaker 2: and rebates for EV's. 102 00:04:34,640 --> 00:04:37,159 Speaker 1: But on top of that, customer demand for EV's just 103 00:04:37,240 --> 00:04:40,000 Speaker 1: hasn't happened in the way these brands expected. 104 00:04:39,640 --> 00:04:41,800 Speaker 2: And sinlantas An the only ones who made a big 105 00:04:41,839 --> 00:04:42,840 Speaker 2: bet and lost out. 106 00:04:42,839 --> 00:04:45,719 Speaker 1: Nope. Ford just announced a nineteen point five billion US 107 00:04:45,760 --> 00:04:48,200 Speaker 1: dollar write down on their EV related assets. 108 00:04:47,960 --> 00:04:50,760 Speaker 2: And GM copped a six billion dollar hit after pivoting 109 00:04:50,760 --> 00:04:51,520 Speaker 2: away from evs. 110 00:04:51,640 --> 00:04:54,040 Speaker 1: So for now, many of these car makers are pivoting 111 00:04:54,080 --> 00:04:56,080 Speaker 1: back to combustion and hybrid cars. 112 00:04:56,160 --> 00:04:59,440 Speaker 2: For our third and final story, the private equity owners 113 00:04:59,440 --> 00:05:02,679 Speaker 2: of the Man are looking to offload the company after 114 00:05:02,720 --> 00:05:05,960 Speaker 2: the weight loss market has been totally reshaped by GLP 115 00:05:06,080 --> 00:05:06,760 Speaker 2: one drugs. 116 00:05:06,800 --> 00:05:09,480 Speaker 1: The scales have well and truly shifted be men away 117 00:05:09,520 --> 00:05:11,479 Speaker 1: from the powders. So tell me what well. 118 00:05:11,560 --> 00:05:14,600 Speaker 2: The story starts with a former NRL player, Adam McDougall, 119 00:05:14,680 --> 00:05:17,920 Speaker 2: who launched the Man Shake back into NT thirteen alongside 120 00:05:17,960 --> 00:05:18,279 Speaker 2: his wife. 121 00:05:18,360 --> 00:05:20,880 Speaker 1: Yeah. The goal was originally they helped men lose weight 122 00:05:21,000 --> 00:05:23,960 Speaker 1: without the usual fad diets, and then they added the 123 00:05:24,000 --> 00:05:26,599 Speaker 1: Lady Shake and the kid shake as well. The following minute, 124 00:05:26,680 --> 00:05:28,880 Speaker 1: it was doing one hundred and twenty two million revenue 125 00:05:28,920 --> 00:05:32,200 Speaker 1: and sold a majority steak to private equity player Pacific 126 00:05:32,240 --> 00:05:35,000 Speaker 1: Equity Partners, which valued the company at over four hundred 127 00:05:35,000 --> 00:05:38,359 Speaker 1: million bakarooneys, but now Pacific Equity Partners is looking to 128 00:05:38,440 --> 00:05:41,440 Speaker 1: offload at Steak into the parent company Kranky Health, which 129 00:05:41,480 --> 00:05:43,520 Speaker 1: owns the Man Shake, the Lady Shake and the Kid 130 00:05:43,560 --> 00:05:46,159 Speaker 1: Shake and the Man at. Pacific Equity Partners have acknowledged 131 00:05:46,240 --> 00:05:48,240 Speaker 1: that when they sell this business, it's probably not going 132 00:05:48,320 --> 00:05:50,680 Speaker 1: to be worth the same amount they invested out. Why 133 00:05:50,800 --> 00:05:56,480 Speaker 1: is that juddy boy? One word GLP one's is cutting. 134 00:05:56,640 --> 00:05:59,200 Speaker 1: They're powdered shake lunch. Very good word that word? So 135 00:05:59,279 --> 00:06:01,240 Speaker 1: what is the key? Learn? The biggest threat to your 136 00:06:01,240 --> 00:06:03,920 Speaker 1: business often doesn't look like you you see. 137 00:06:03,960 --> 00:06:08,560 Speaker 2: Companies often think competition comes from other companies making similar products, 138 00:06:08,560 --> 00:06:10,960 Speaker 2: but more and more we're seeing disruption come from companies 139 00:06:10,960 --> 00:06:14,080 Speaker 2: in adjacent industries. These are companies solving the exact same 140 00:06:14,080 --> 00:06:16,600 Speaker 2: customer problem, just in a completely different way. Take the 141 00:06:16,680 --> 00:06:20,320 Speaker 2: GLP one drugs like ozmpig we Go, the Munjaro yep, 142 00:06:20,400 --> 00:06:23,400 Speaker 2: they're not competing on the flavor or protein content, They're 143 00:06:23,400 --> 00:06:26,560 Speaker 2: competing on weight loss results. In fact, in the year 144 00:06:26,600 --> 00:06:30,239 Speaker 2: to April twenty twenty five alone, over six million jabs 145 00:06:30,520 --> 00:06:31,760 Speaker 2: was sold in Australia. 146 00:06:31,839 --> 00:06:34,320 Speaker 1: So be man. You can see why Pacific Equity partners 147 00:06:34,440 --> 00:06:38,240 Speaker 1: want out before the shakes get completely shaken. Flex Sam, 148 00:06:38,240 --> 00:06:39,960 Speaker 1: did you know over the past one hundred and twenty years, 149 00:06:40,040 --> 00:06:42,600 Speaker 1: eighty one percent of calend years have ended with positive 150 00:06:42,640 --> 00:06:45,480 Speaker 1: returns on the all ordinaries. But that does not mean 151 00:06:45,560 --> 00:06:48,360 Speaker 1: when share markets fall, they fall hard and that needs 152 00:06:48,360 --> 00:06:50,800 Speaker 1: to me Defensive oursets like FIXT Income Securities come in. 153 00:06:50,920 --> 00:06:52,920 Speaker 1: Make sure to download the Bucks app and check it out. 154 00:06:52,960 --> 00:06:56,720 Speaker 2: Thanks for listening and we'll see you on Friday.