Speaker 1: This is what the flux.
Speaker 2: I'm justin and I'm harsh Deep and it's Wednesday, the
Speaker 2: twenty ninth of May.
Speaker 1: A see a lot of Ossie's are watching Netflix right now.
Speaker 1: And Netflix is benefiting from this big time. Get this,
Speaker 1: It made more than one point one billion dollars from
Speaker 1: Australian consumers last year.
Speaker 2: Wow.
Speaker 1: But he actually shifted more than one billion dollars of
Speaker 1: that revenue to its US parent company. So that means
Speaker 1: the Flicks pay tax on just eight percent of its
Speaker 1: Australian generated revenue. And I kind of feel like Assi's
Speaker 1: this gives us justification for password sharing.
Speaker 2: I agree. I think so too. As we often hear
Speaker 2: about journaling about your thoughts or your day or creativity.
Speaker 2: But have you ever reflected on where you're at with
Speaker 2: your money? In the flux sapp, We've built a money
Speaker 2: check in which asks you five simple questions and shows
Speaker 2: you a score of where you're at with your money
Speaker 2: this month, So make sure to download the Flux SAP
Speaker 2: and do the money check in before the end of
Speaker 2: this month.
Speaker 1: Three reflective stories today, let's get into it. For our
Speaker 1: first set, the Australian Luxury Goods Marketplace has seen at
Speaker 1: share price jump more than ten percent early this week
Speaker 1: after it denied allegations that has fake products on its platform.
Speaker 2: Seems strange that a denial of something really bad has
Speaker 2: actually seen a share price jumper. Tell me more.
Speaker 1: Okay. So, Setire is the luxury goods marketplace that was
Speaker 1: founded back in twenty seventeen and listed on the ASEX
Speaker 1: in December twenty twenty, and just.
Speaker 2: Since those early days, Satire has grown to over one
Speaker 2: million orders per year.
Speaker 1: And they're not selling anchor or home brand products. We're
Speaker 1: talking high end brands like Louis Vuitton, Mike Prada, Valentino.
Speaker 2: But there has been a lot of controversy around set Tire,
Speaker 2: largely because it doesn't deal directly with the high end brands, and.
Speaker 1: That's raised some serious concerns about the quality as well
Speaker 1: as the origin of the products that are sold on
Speaker 1: their website.
Speaker 2: Am I getting a two thousand dollars discount on a
Speaker 2: genuine Balenciaga bag or am I paying a serious markup
Speaker 2: for a knockoff?
Speaker 1: So actually, a global due diligence firm, which has done
Speaker 1: more than one hundred thousand investigations, has now done a
Speaker 1: deep dive into and.
Speaker 2: They found a complex company structure, opaque supply and logistics network,
Speaker 2: and a poor complaints handling process.
Speaker 1: It's fair to say that is all major cause for concern.
Speaker 2: But then Satire released a report saying that they reject
Speaker 2: entirely the allegations, and.
Speaker 1: The story gets juhd because Setia also said this ju
Speaker 1: Diligence firm was commissioned to do the report by a short.
Speaker 2: Seller and the goal of this report was to dent
Speaker 2: the share price of Satire to the benefit of the
Speaker 2: short seller.
Speaker 1: Next thing you know, share price up ten percent.
Speaker 2: So tell me what is the key learning here.
Speaker 1: Short Selling is the process of selling shares to someone
Speaker 1: at current prices with the aim of buying them back
Speaker 1: later at a lower.
Speaker 2: Price, and it's done by borrowing shares of a company
Speaker 2: from a broker first. Often, short sellers will do a
Speaker 2: lot of investigative research on a.
Speaker 1: Company, understanding company structures, who their supplies, are, speaking to
Speaker 1: their customers.
Speaker 2: And once they have conviction that something is a little
Speaker 2: bit fishy, they'll take a short position in that company.
Speaker 1: And then often release the report to the mark highlighting
Speaker 1: all the fishy stuff going on. All in all, it's
Speaker 1: kind of hard to know right now whether the report
Speaker 1: inter Setire is accurate, but we do know.
Speaker 2: That it didn't seem to face satires investors.
Speaker 1: For our second story, Petstock, the pet food retailer backed
Speaker 1: by Woolworths, has been forced to sell over forty of
Speaker 1: its stores and has created a new major competitor in
Speaker 1: the process.
Speaker 2: Wall is really battling to become the top dog.
Speaker 1: Here.
Speaker 2: Tell me more about this one.
Speaker 1: Okay. So Petstock started back in nineteen ninety five in
Speaker 1: a regional town in Victoria called Ballarat.
Speaker 2: And since then it's grown to become Australia's second biggest
Speaker 2: pet retailer.
Speaker 1: We're talking two hundred and seventy six stores and a
Speaker 1: loyal path of more than two point four million members.
Speaker 2: Quick reminder. In December twenty twenty two, Woolworths acquired a
Speaker 2: fifty five percent steak in Petstock for five hundred and
Speaker 2: eighty six million dollars.
Speaker 1: But that was subject to the hubal Ce reviewing the deal.
Speaker 2: And review the deal they did. In order to get
Speaker 2: the deal done, Petstock was forced to sell forty one
Speaker 2: of its stores and twenty five co located vet clinics,
Speaker 2: and those stores and vet clinics have been sold to
Speaker 2: pet Oh for an undisclosed amount.
Speaker 1: But what we do know is that the sale of
Speaker 1: these stores will triple pet O's revenue into over two
Speaker 1: hundred million dollars perameter, and.
Speaker 2: This will mean pet O is marketing its territory as
Speaker 2: the third biggest pet retailer in Australia according to IBS
Speaker 2: welt Wow.
Speaker 1: So what is the key learning here?
Speaker 2: Regulatory decisions aimed at creating market competition can sometimes lead
Speaker 2: to unintended consequences for companies.
Speaker 1: Or intended consequences for the Atria'll see you see JS.
Speaker 2: Woolwort's acquisition of pet Stock was all part of their
Speaker 2: plan to dominate the pet space.
Speaker 1: But because of concerns around competition force them to divest
Speaker 1: a number of the pet Stock.
Speaker 2: Assets that included the brand's best Friends, Our Vet, My
Speaker 2: pet Warehouse and pet City.
Speaker 1: The challenge from Woolworths was to find a buyer for
Speaker 1: those pet Stock assets without inadvertently creating a stronger competitor.
Speaker 2: So by selling these stores to pet O, a smaller
Speaker 2: chain at the time, Wilworts has effectively enabled Peto to
Speaker 2: triple its revenue.
Speaker 1: And contributed to the rise of a significant new player
Speaker 1: in the ten billion dollar pet sector.
Speaker 2: For our third and final story, TPG has come out
Speaker 2: and said that tech giants like Google and Meta should
Speaker 2: be made to pay for telco infrastructure.
Speaker 1: That is sure to grind the gears of tech CEOs.
Speaker 1: So what is the story here?
Speaker 2: TPG is the third largest telco company in Australia with
Speaker 2: over five point eight million subscribers, and.
Speaker 1: It's the parent company of other telco brands like Mootaphone,
Speaker 1: i Net and Labara.
Speaker 2: Now TPG has publicly come out against tech giants and
Speaker 2: said that they should be made to pay for the
Speaker 2: rollout of five G networks and telco infrastructure.
Speaker 1: Shots fired. TPG reckons that tech companies like Google and
Speaker 1: Netflix they make massive profit off the back of Australia's
Speaker 1: telco networks.
Speaker 2: And that they encourage people to consume more data by
Speaker 2: watching Bridgeton and Baby Reindeer marathons.
Speaker 1: But ah, these tech companies don't spend a single dollar
Speaker 1: on the internet infrastructure that they rely on. So tell me, H,
Speaker 1: what is the key learning here?
Speaker 2: When an industry is benefiting at the cost of another,
Speaker 2: sometimes regulators need to step in to create a fair outcome.
Speaker 1: Meanwhile, tech giants have started pushing back against this idea
Speaker 1: of paying for Internet access. They're even calling it the
Speaker 1: Internet Task.
Speaker 2: But TPGs not the first to take.
Speaker 1: This stance, Nope. In fact, regulatory bodies in the EU,
Speaker 1: in South Korea, and India have all started working on
Speaker 1: a solution as well.
Speaker 2: Because get this, Jazz, Google, Netflix, Meta, Apple, Amazon, and
Speaker 2: Microsoft together generate nearly half of all Internet.
Speaker 1: Traffic, and as the digital economy expands, so does the
Speaker 1: need for strong Internet infrastructure. Flex sam if you're looking
Speaker 1: at journaling about your emotions, your feelings, one add a
Speaker 1: financial check in as well. We've got it all covered
Speaker 1: in the Flux app with our money check in. To
Speaker 1: download the Flex app and do the money check in.
Speaker 2: Thanks for listening and we'll see you on Friday.