1
00:00:05,360 --> 00:00:08,320
Speaker 1: This is what the Flux. I'm Brett and Justin and

2
00:00:08,360 --> 00:00:10,080
Speaker 1: it's Wednesday, the thirty first of July.

3
00:00:10,240 --> 00:00:14,160
Speaker 2: Juzzy Boy, it's easy, Come, easygo for Carl's Junior, the

4
00:00:14,400 --> 00:00:17,600
Speaker 2: American burger restaurant that hit Aussie shaws in twenty sixteen,

5
00:00:17,960 --> 00:00:21,680
Speaker 2: and they announced plans to open three hundred stores back then. Sadly,

6
00:00:21,880 --> 00:00:25,200
Speaker 2: the company has placed its Australian stores into voluntary administration

7
00:00:25,400 --> 00:00:28,320
Speaker 2: after quite a fullback in consumer spending.

8
00:00:28,400 --> 00:00:31,400
Speaker 1: Now, flex Fam. If the words taxable income, accessible income,

9
00:00:31,480 --> 00:00:34,159
Speaker 1: capital gains tax, if they give you shivers, there is

10
00:00:34,280 --> 00:00:36,559
Speaker 1: one place, and it is in the Flux Academy. This

11
00:00:36,680 --> 00:00:39,120
Speaker 1: month we take you through the FY twenty four tax

12
00:00:39,120 --> 00:00:41,320
Speaker 1: toolkit and how you can maxim my detax return and

13
00:00:41,360 --> 00:00:43,479
Speaker 1: get big dollars back in your account. Make sure you

14
00:00:43,520 --> 00:00:45,640
Speaker 1: download the Flux out and check out the Academy this month.

15
00:00:45,720 --> 00:00:48,879
Speaker 2: Three refreshing stories Today, Juzzy Boy, Let's do it for

16
00:00:49,080 --> 00:00:52,839
Speaker 2: our first Canvas has announced that it will acquire AI

17
00:00:53,040 --> 00:00:58,200
Speaker 2: startup Leonardo Ai in a big deal for Australia's startup ecosystem.

18
00:00:58,280 --> 00:01:01,120
Speaker 1: Jeez, Camera's going hard on its aap man, So tell

19
00:01:01,160 --> 00:01:01,960
Speaker 1: me what's going on here?

20
00:01:02,000 --> 00:01:04,960
Speaker 2: Well, Jazi boy. We know Canvas as the design software

21
00:01:04,959 --> 00:01:07,760
Speaker 2: company that's become Australia's golden child.

22
00:01:07,840 --> 00:01:10,680
Speaker 1: Yep, that's thanks to its forty billion dollar evaluation and

23
00:01:10,720 --> 00:01:12,959
Speaker 1: one hundred and eighty million monthly active users.

24
00:01:13,080 --> 00:01:16,480
Speaker 2: Now, Canvas has announced that it will acquire Leonardo Ai,

25
00:01:16,600 --> 00:01:19,640
Speaker 2: an AI startup which is also based in Australia.

26
00:01:19,720 --> 00:01:21,920
Speaker 1: And what does this Leonardo do well?

27
00:01:22,000 --> 00:01:25,399
Speaker 2: Leonardo is an image generation company that started actually in

28
00:01:25,440 --> 00:01:28,679
Speaker 2: the gaming industry, but since then has expanded to other

29
00:01:28,760 --> 00:01:31,440
Speaker 2: industries like film and even architecture.

30
00:01:31,440 --> 00:01:33,240
Speaker 1: Okay, be man, cut to the chase. How much did

31
00:01:33,240 --> 00:01:33,760
Speaker 1: they pay for it?

32
00:01:33,920 --> 00:01:36,679
Speaker 2: Well, Juzi boy, I did some snooping around and the

33
00:01:36,720 --> 00:01:39,120
Speaker 2: result is an undisclosed amount.

34
00:01:39,360 --> 00:01:41,080
Speaker 1: Canva being a little bit secretive there.

35
00:01:41,240 --> 00:01:43,720
Speaker 2: Yeah, Well, what we do know is that Leonardo AI

36
00:01:43,880 --> 00:01:47,120
Speaker 2: raised forty seven million bucks last year and has tripled

37
00:01:47,160 --> 00:01:50,440
Speaker 2: its users since then to nineteen million monthly active It's

38
00:01:50,440 --> 00:01:51,120
Speaker 2: been called the.

39
00:01:51,080 --> 00:01:53,760
Speaker 1: Next Canva with how rapidly its user base is growing.

40
00:01:53,800 --> 00:01:56,680
Speaker 2: But rather than battling head to head, the two companies

41
00:01:56,720 --> 00:01:58,680
Speaker 2: have officially joined forces.

42
00:01:58,360 --> 00:02:01,200
Speaker 1: And this merger out will give Canva exclusive access to

43
00:02:01,280 --> 00:02:04,200
Speaker 1: Leonardo AI's technology to improve its own.

44
00:02:04,040 --> 00:02:06,360
Speaker 2: Set of AI tools. Good call, Jazi boy. So what's

45
00:02:06,360 --> 00:02:07,080
Speaker 2: the key learning here?

46
00:02:07,120 --> 00:02:09,000
Speaker 1: If you can't beat them, buy them.

47
00:02:09,080 --> 00:02:12,000
Speaker 2: This acquisition is a strategic way for Canvas to level

48
00:02:12,120 --> 00:02:15,040
Speaker 2: up its own AI game muchure faster.

49
00:02:15,240 --> 00:02:18,080
Speaker 1: Yeah, this deal gives Campa access to Leonardo AI's tech.

50
00:02:18,240 --> 00:02:21,240
Speaker 1: It also gives them access to its IP, its team

51
00:02:21,280 --> 00:02:24,040
Speaker 1: of AI experts, and gives them access to the future

52
00:02:24,040 --> 00:02:25,840
Speaker 1: tech that it will build. Now and we know that

53
00:02:25,880 --> 00:02:28,880
Speaker 1: acquisitions have been a big part of canvas growth story

54
00:02:28,880 --> 00:02:29,239
Speaker 1: so far.

55
00:02:29,360 --> 00:02:32,480
Speaker 2: Yep, Leonardo AI will be canvas eighth are repeat eight

56
00:02:32,560 --> 00:02:34,160
Speaker 2: acquisitions since twenty eighteen, and.

57
00:02:34,120 --> 00:02:36,160
Speaker 1: It's not the only tech company using the old buy

58
00:02:36,240 --> 00:02:39,239
Speaker 1: overbuild strategy to get ahead in AI. Get this be man.

59
00:02:39,280 --> 00:02:42,600
Speaker 1: Apple has purchased more than twenty AI startups since twenty seventeen,

60
00:02:42,680 --> 00:02:45,320
Speaker 1: and Microsoft and Meta have purchased more than ten as well.

61
00:02:45,440 --> 00:02:48,280
Speaker 2: Wow, so Canvas inched ahead with its new acquisition, But

62
00:02:48,360 --> 00:02:50,600
Speaker 2: the AI race well and truly continues.

63
00:02:51,160 --> 00:02:54,320
Speaker 1: For our second story, Rex Airlines shares are in a

64
00:02:54,360 --> 00:02:56,520
Speaker 1: trading hole as it tries to find a way to

65
00:02:56,680 --> 00:02:58,240
Speaker 1: stay out of administration.

66
00:02:58,520 --> 00:03:01,480
Speaker 2: First it was Bonza and now REXI Rex as well.

67
00:03:01,600 --> 00:03:03,359
Speaker 2: So tell me what's going on here? Juzzy boy I.

68
00:03:03,520 --> 00:03:06,680
Speaker 1: So REX, or it's full name, Regional Express, launched back

69
00:03:06,680 --> 00:03:09,280
Speaker 1: in two thousand and two as an airline specialized in

70
00:03:09,520 --> 00:03:11,120
Speaker 1: regional routes around Australia.

71
00:03:11,200 --> 00:03:16,040
Speaker 2: We're talking Cans to Townsville or Broken Hill to Dubbo.

72
00:03:15,760 --> 00:03:18,000
Speaker 1: Don't forget Bernie to King Island as well and.

73
00:03:18,040 --> 00:03:20,440
Speaker 2: Josey boy Well. REX listed on the ASX in two

74
00:03:20,440 --> 00:03:23,960
Speaker 2: thousand and five. It really became prominent in Australia during

75
00:03:24,000 --> 00:03:25,000
Speaker 2: COVID times.

76
00:03:24,720 --> 00:03:27,359
Speaker 1: And that's because in twenty twenty one, REX expanded its

77
00:03:27,400 --> 00:03:30,600
Speaker 1: flying roots to include the Golden Triangle of Australia. That

78
00:03:30,639 --> 00:03:33,320
Speaker 1: would be flights between Melbourne, Sydney and Brisbane, which are

79
00:03:33,360 --> 00:03:35,840
Speaker 1: the busiest routs in Australia, and then Man. When Virgin

80
00:03:35,880 --> 00:03:39,000
Speaker 1: Australia went into voluntary administration in twenty twenty, REX saw

81
00:03:39,000 --> 00:03:41,840
Speaker 1: its opportunity to own a big chunk of these roots.

82
00:03:42,240 --> 00:03:45,000
Speaker 2: So Rex borrowed one hundred and fifty mil in convertible

83
00:03:45,040 --> 00:03:47,640
Speaker 2: notes from a private equity firm which goes by the

84
00:03:47,720 --> 00:03:49,320
Speaker 2: name of PAG and.

85
00:03:49,280 --> 00:03:51,200
Speaker 1: Then Man and now it's time to pay back PAG.

86
00:03:51,480 --> 00:03:53,680
Speaker 2: And this is a worry for REX, which recently has

87
00:03:53,720 --> 00:03:57,000
Speaker 2: had major board disputes and has now gone into a

88
00:03:57,040 --> 00:03:57,640
Speaker 2: trading hole.

89
00:03:57,720 --> 00:04:00,320
Speaker 1: In fact, they've paused any bookings on New Fly for.

90
00:04:00,320 --> 00:04:03,280
Speaker 2: The next two weeks, all part of Rex's plans to

91
00:04:03,400 --> 00:04:06,400
Speaker 2: hopefully avoid going into voluntary administration.

92
00:04:06,520 --> 00:04:08,240
Speaker 1: So tell me what is the key learning here.

93
00:04:08,360 --> 00:04:12,119
Speaker 2: Convertible notes are short term loans that convert into equity

94
00:04:12,280 --> 00:04:16,120
Speaker 2: at a predetermined conversion event and be Man. This predetermined

95
00:04:16,200 --> 00:04:18,840
Speaker 2: event that you speak of could be a whole range

96
00:04:18,839 --> 00:04:21,960
Speaker 2: of things. It might be the sale of the company

97
00:04:22,120 --> 00:04:22,839
Speaker 2: or an IPO.

98
00:04:23,080 --> 00:04:25,919
Speaker 1: It might be if specific performance targets are met, but

99
00:04:25,960 --> 00:04:28,920
Speaker 1: often it's at a specific date called the maturity date.

100
00:04:28,960 --> 00:04:31,880
Speaker 1: And be Man, the original amount lent plus any interest

101
00:04:31,960 --> 00:04:33,320
Speaker 1: will convert into equity.

102
00:04:33,360 --> 00:04:36,360
Speaker 2: So juzy boy, it's unclear if or when PAG will

103
00:04:36,400 --> 00:04:37,640
Speaker 2: convert these shares.

104
00:04:37,320 --> 00:04:40,080
Speaker 1: And b Man. Sadly, Rex ain't the first Ossie airline

105
00:04:40,120 --> 00:04:42,400
Speaker 1: to struggle under the weight of their debts. No, we know.

106
00:04:42,600 --> 00:04:45,520
Speaker 2: Bonds A fell earlier this year, Virgin Australia fell during

107
00:04:45,520 --> 00:04:47,839
Speaker 2: COVID but is back, and of course Tiger Air.

108
00:04:48,600 --> 00:04:52,080
Speaker 1: For our third and final story, McDonald's sales have fallen

109
00:04:52,160 --> 00:04:55,760
Speaker 1: for the first time in thirteen quarters because apparently Macu's

110
00:04:55,760 --> 00:04:58,359
Speaker 1: big max are pricing people out of the fast food market.

111
00:04:58,400 --> 00:05:00,520
Speaker 2: I reckon, Juzzi boy. The secret to success is just

112
00:05:00,560 --> 00:05:03,560
Speaker 2: making sure the ice cream machines are actually working at McDonald's.

113
00:05:03,600 --> 00:05:05,560
Speaker 1: Tell me more. Okay, So MACI D's is the home

114
00:05:05,600 --> 00:05:08,880
Speaker 1: of all comfort foods. You're salty Salty Chips, you're big Macburgers,

115
00:05:08,920 --> 00:05:10,400
Speaker 1: you Mcflurri's.

116
00:05:10,000 --> 00:05:12,600
Speaker 2: And don't you forget the home of Ronald McDonald, who's

117
00:05:12,600 --> 00:05:14,880
Speaker 2: actually I think been killed off by the Macas marketing

118
00:05:14,880 --> 00:05:15,680
Speaker 2: team in reason.

119
00:05:15,680 --> 00:05:17,839
Speaker 1: Is interesting, true, but the man, comfort food and fast

120
00:05:17,839 --> 00:05:20,960
Speaker 1: food apparently comes at a pretty hefty cost these days.

121
00:05:21,040 --> 00:05:23,880
Speaker 2: Macas reported that global sales fell one percent in the

122
00:05:23,920 --> 00:05:25,680
Speaker 2: second quarter of this year, and the man, it's the

123
00:05:25,720 --> 00:05:28,480
Speaker 2: first quarter in over three years that it's gone backwards.

124
00:05:28,520 --> 00:05:30,760
Speaker 1: So what's been the cause of this downfall? The biggest

125
00:05:30,800 --> 00:05:33,280
Speaker 1: hip for Macas has been low income consumers who have

126
00:05:33,360 --> 00:05:35,000
Speaker 1: cut back on their Macas visits.

127
00:05:35,040 --> 00:05:37,039
Speaker 2: But there is some good news. It's five dollars meal

128
00:05:37,080 --> 00:05:39,799
Speaker 2: deals have sold above expectations.

129
00:05:39,040 --> 00:05:41,320
Speaker 1: So now Macas is going to lean back into its

130
00:05:41,400 --> 00:05:44,320
Speaker 1: value deals to bring back its customers. Interesting, So, what

131
00:05:44,440 --> 00:05:46,480
Speaker 1: is the key learning when you stray too far from

132
00:05:46,520 --> 00:05:50,280
Speaker 1: your winning playbook? You're risk losing your competitive edge, Douzy boy.

133
00:05:50,400 --> 00:05:53,479
Speaker 2: We know that Macas has always positioned itself as good

134
00:05:53,560 --> 00:05:56,839
Speaker 2: quality taste wise and good value money wise.

135
00:05:56,920 --> 00:06:00,200
Speaker 1: In fact, be man During previous economic downturns, Mac's has

136
00:06:00,240 --> 00:06:02,080
Speaker 1: actually brought in more customers.

137
00:06:02,240 --> 00:06:04,359
Speaker 2: But over the past few years, with the rise of

138
00:06:04,440 --> 00:06:08,160
Speaker 2: raw material costs, mac has significantly increased its prices.

139
00:06:08,240 --> 00:06:10,120
Speaker 1: Get this, the average prices of Big Mac in the

140
00:06:10,200 --> 00:06:13,000
Speaker 1: US is up twenty one percent since twenty nineteen.

141
00:06:12,800 --> 00:06:15,000
Speaker 2: Or the price of French fries here in Australia, which

142
00:06:15,000 --> 00:06:17,080
Speaker 2: I've been keeping my eye on, up fifty percent since

143
00:06:17,120 --> 00:06:18,400
Speaker 2: twenty nineteen, Josie Boy.

144
00:06:18,440 --> 00:06:20,920
Speaker 1: And as a result, for some Macus has actually lost

145
00:06:20,960 --> 00:06:24,040
Speaker 1: its reputation for value as well as its customers.

146
00:06:24,160 --> 00:06:26,840
Speaker 2: Many low income customers are heading to other fast food

147
00:06:26,880 --> 00:06:29,520
Speaker 2: chains like Burger King or Domino's.

148
00:06:29,720 --> 00:06:32,240
Speaker 1: Yep, burging scene at sales grow by leaning on the

149
00:06:32,279 --> 00:06:33,680
Speaker 1: Macca's value playbook.

150
00:06:33,720 --> 00:06:37,560
Speaker 2: So now Jusiboy, Maccas is scrambling madly to create new

151
00:06:37,640 --> 00:06:40,720
Speaker 2: value deals so it can bring back dem customers.

152
00:06:40,760 --> 00:06:43,080
Speaker 1: Flux iam Max time is one of the most confusing

153
00:06:43,160 --> 00:06:45,520
Speaker 1: and kind of painful times of the year. We actually

154
00:06:45,520 --> 00:06:47,200
Speaker 1: need to know what you're doing. We have it all

155
00:06:47,200 --> 00:06:49,480
Speaker 1: covered in the Flux app with the FI twenty four

156
00:06:49,560 --> 00:06:51,680
Speaker 1: tax toolkits. Make sure you download the app and check

157
00:06:51,720 --> 00:06:52,200
Speaker 1: it all out.

158
00:06:52,240 --> 00:06:56,000
Speaker 2: Thanks for listening, and we'll see you on Friday.