1 00:00:05,200 --> 00:00:08,640 Speaker 1: This is what the Flux. I'm Brettan. I justin and Wednesday, 2 00:00:08,680 --> 00:00:10,760 Speaker 1: the fifth of March, Juzy boy, it's a sad day 3 00:00:10,800 --> 00:00:13,680 Speaker 1: for all the og Skype users. Microsoft has announced it 4 00:00:13,720 --> 00:00:16,759 Speaker 1: will be shutting down Skype this May after acquiring it 5 00:00:16,840 --> 00:00:19,760 Speaker 1: nearly fifteen years ago, or as they like to call it, 6 00:00:19,920 --> 00:00:23,680 Speaker 1: retiring the product. All Skypes colleagues must be chipping in 7 00:00:23,720 --> 00:00:26,360 Speaker 1: for its very large retirement gift. 8 00:00:27,160 --> 00:00:30,040 Speaker 2: Three and a half trillion dollars is in the superannuation 9 00:00:30,280 --> 00:00:33,319 Speaker 2: industry in Australia and the average Australian has more than 10 00:00:33,440 --> 00:00:35,800 Speaker 2: one and a half super funds. If you're sitting there 11 00:00:35,800 --> 00:00:38,199 Speaker 2: thinking that is me, there is only one place to go. 12 00:00:38,360 --> 00:00:40,199 Speaker 2: That is in the Flux Academy. This month ll we 13 00:00:40,280 --> 00:00:42,640 Speaker 2: color everything related to Superer, what it is, how to 14 00:00:42,720 --> 00:00:44,400 Speaker 2: use it and how to choose the super fun most 15 00:00:44,400 --> 00:00:45,000 Speaker 2: suitable for you. 16 00:00:45,159 --> 00:00:46,760 Speaker 1: Make sure to go to the Academy this month to 17 00:00:46,840 --> 00:00:49,520 Speaker 1: check it all out. Three colorful stories today, Juzzy boy, 18 00:00:49,600 --> 00:00:52,640 Speaker 1: let's do it for our first. Amazon Australia has seen 19 00:00:52,640 --> 00:00:56,080 Speaker 1: this revenue jump to seven point seven billion bakarunis in 20 00:00:56,120 --> 00:00:59,000 Speaker 1: the last financial year, which is up nearly twenty percent 21 00:00:59,080 --> 00:01:00,120 Speaker 1: compared to last year, the. 22 00:01:00,200 --> 00:01:03,200 Speaker 2: Zon arriving at the doorstep of serious dominance. B Man, 23 00:01:03,200 --> 00:01:04,080 Speaker 2: So tell me more. 24 00:01:03,960 --> 00:01:07,479 Speaker 1: Well, juziboy, we know the Zon started in nineteen ninety 25 00:01:07,560 --> 00:01:10,280 Speaker 1: four as a humble online bookseller, didn't make. 26 00:01:10,160 --> 00:01:12,640 Speaker 2: A profit for many years, back when being an unprofitable 27 00:01:12,640 --> 00:01:13,920 Speaker 2: company was not cool. 28 00:01:14,160 --> 00:01:17,399 Speaker 1: Now, Amazon launched in Australia in twenty seventeen, and while 29 00:01:17,400 --> 00:01:20,080 Speaker 1: they did start pretty quietly, they've spent a lot of 30 00:01:20,160 --> 00:01:21,760 Speaker 1: money building up that brand. Here. 31 00:01:21,760 --> 00:01:24,919 Speaker 2: In fact, be man, Amazon spent around twenty billion dollars 32 00:01:24,920 --> 00:01:25,880 Speaker 2: investing in Australia. 33 00:01:25,959 --> 00:01:27,920 Speaker 1: Seems to be paying off for the zone. Now. It's 34 00:01:28,040 --> 00:01:31,240 Speaker 1: local revenue jumped nearly twenty percent. It's e commerce business 35 00:01:31,280 --> 00:01:34,040 Speaker 1: in Australia jump twenty three percent. How about that cloud 36 00:01:34,080 --> 00:01:37,760 Speaker 1: computing division aws up eighteen percent. But the winner winner 37 00:01:37,920 --> 00:01:42,040 Speaker 1: Chicken Dinner was Amazon Prime. Yeah, Amazon's Prime loyalty subscription 38 00:01:42,120 --> 00:01:45,160 Speaker 1: program jump thirty nine percent just for the last year. 39 00:01:45,000 --> 00:01:47,600 Speaker 2: And b Man, Amazon law, Amazon's loyalty program is the 40 00:01:47,640 --> 00:01:51,880 Speaker 2: subscription service that just keeps on delivering literally and financially. 41 00:01:51,960 --> 00:01:53,160 Speaker 1: So what is the key learning here? 42 00:01:53,240 --> 00:01:55,880 Speaker 2: Loyalty programs do more than just keep your customers loyal. 43 00:01:56,000 --> 00:01:57,680 Speaker 2: They keep your customers spending. 44 00:01:57,760 --> 00:02:00,720 Speaker 1: Get this one, juzy boy. Amazon Prime members sped around 45 00:02:00,760 --> 00:02:02,920 Speaker 1: one thousand bucks per year on Amazon. 46 00:02:03,080 --> 00:02:05,640 Speaker 2: Oh, non Prime members spend between one hundred and five 47 00:02:05,720 --> 00:02:06,360 Speaker 2: hundred dollars. 48 00:02:06,400 --> 00:02:08,440 Speaker 1: And that's the beauty of Amazon's loyalty program. 49 00:02:08,520 --> 00:02:10,600 Speaker 2: Yeah, not only does it generate four hundred and eighty 50 00:02:10,720 --> 00:02:13,359 Speaker 2: million dollars in revenue in Australia alone, but it's a 51 00:02:13,400 --> 00:02:15,600 Speaker 2: full blown customer spending booster. 52 00:02:15,720 --> 00:02:18,040 Speaker 1: They're on top of that, Amazon has a ninety three 53 00:02:18,080 --> 00:02:21,520 Speaker 1: percent retention rate of Amazon Prime, and that is after 54 00:02:21,560 --> 00:02:22,160 Speaker 1: the first year. 55 00:02:22,160 --> 00:02:24,160 Speaker 2: And they man that's why so many other companies have 56 00:02:24,240 --> 00:02:27,400 Speaker 2: tried to replicate Amazon Prime's loyalty program. You've got Uber 57 00:02:27,480 --> 00:02:30,280 Speaker 2: with Uber one, West Farmers with one, Pass, Coals has 58 00:02:30,320 --> 00:02:31,840 Speaker 2: its Coals Plus. 59 00:02:31,760 --> 00:02:33,800 Speaker 1: And Cogan with its cogud one as well. And while 60 00:02:33,800 --> 00:02:35,480 Speaker 1: it took a while for Amazon to hit its full 61 00:02:35,520 --> 00:02:38,160 Speaker 1: potential in Australia, you can now see why it's starting 62 00:02:38,200 --> 00:02:40,920 Speaker 1: to squeeze out local e commerce players. 63 00:02:41,120 --> 00:02:44,760 Speaker 2: For our second story, mar Zinc, the snack and sweets giant, 64 00:02:44,960 --> 00:02:47,760 Speaker 2: is planning to sell twenty five to thirty billion US 65 00:02:47,840 --> 00:02:50,560 Speaker 2: dollars worth of bonds next week to finance its takeover 66 00:02:50,760 --> 00:02:51,640 Speaker 2: of Kelenoba. 67 00:02:51,840 --> 00:02:54,600 Speaker 1: This deal looking extra chewy. Tell me what's going on here? Okay? 68 00:02:54,600 --> 00:02:57,400 Speaker 2: So, mar Zinc is the family owned human food, pet 69 00:02:57,440 --> 00:02:59,520 Speaker 2: food and snacking behemoth. 70 00:02:59,080 --> 00:03:01,520 Speaker 1: Started way back nonineteen eleven in the US of eight 71 00:03:01,560 --> 00:03:03,480 Speaker 1: and is the owner of some of the mega food 72 00:03:03,560 --> 00:03:04,480 Speaker 1: brands globally. 73 00:03:04,520 --> 00:03:07,440 Speaker 2: We'd be talking Mars Bar obviously, and Milky Way, Mars's 74 00:03:07,520 --> 00:03:08,919 Speaker 2: arch nemesis. 75 00:03:08,400 --> 00:03:13,080 Speaker 1: Not to forget Maltese's Eminem's TwixT Delicious and Extra Chewing Gum. 76 00:03:13,120 --> 00:03:15,000 Speaker 2: And let's not forget that Mars is fueling our four 77 00:03:15,040 --> 00:03:17,400 Speaker 2: legged friends as well with pet foods like Whiskers and 78 00:03:17,480 --> 00:03:18,079 Speaker 2: Royal Cannon. 79 00:03:18,080 --> 00:03:20,440 Speaker 1: But Josie woit. In August last year, Mars announced they 80 00:03:20,440 --> 00:03:23,960 Speaker 1: would acquire Kelenova for thirty five point nine billion bucks 81 00:03:24,160 --> 00:03:26,840 Speaker 1: US dollars may add in an all cash deal. 82 00:03:26,919 --> 00:03:29,799 Speaker 2: Arue Kellanova's the owner of Pringles and pop Tarts, Nutra Grain, 83 00:03:29,880 --> 00:03:31,400 Speaker 2: Elsiembars and Josie. 84 00:03:31,400 --> 00:03:33,959 Speaker 1: How are pop tarts these days? Are they still good? Delicious? 85 00:03:34,040 --> 00:03:36,360 Speaker 2: And this combined company will be one of the top 86 00:03:36,400 --> 00:03:39,280 Speaker 2: five package food and beverage companies in the whole wide world. 87 00:03:39,760 --> 00:03:42,760 Speaker 1: Wait, someone's got to fund these pop tarts and this deal. Yep. 88 00:03:42,840 --> 00:03:44,920 Speaker 2: So now Mars is planning to sell up to thirty 89 00:03:45,000 --> 00:03:48,360 Speaker 2: billion US dollars of bonds in order to pay for Kelenover. 90 00:03:48,160 --> 00:03:51,200 Speaker 1: And if this lands, this bond offering could become one 91 00:03:51,240 --> 00:03:55,360 Speaker 1: of the largest M and A financing deals since twenty thirteen. Interesting, 92 00:03:55,480 --> 00:03:57,360 Speaker 1: So what is the key learning here? When it comes 93 00:03:57,360 --> 00:04:01,480 Speaker 1: to funding an acquisition, businesses have three main option. 94 00:04:01,360 --> 00:04:03,160 Speaker 2: Option one pay for it with the cash that they 95 00:04:03,200 --> 00:04:05,200 Speaker 2: have on hand, but when we're talking tens of billions 96 00:04:05,240 --> 00:04:06,800 Speaker 2: of dollars that becomes pretty rare. 97 00:04:06,880 --> 00:04:10,080 Speaker 1: Or Option two raise capital for the acquisition by issuing 98 00:04:10,200 --> 00:04:10,960 Speaker 1: new shares. 99 00:04:11,040 --> 00:04:14,400 Speaker 2: When a company creates new shares and dilutes the current ownership. 100 00:04:14,040 --> 00:04:16,880 Speaker 1: And option three would be debt financing like a loan or. 101 00:04:16,880 --> 00:04:19,840 Speaker 2: Bondsman Corporate bonds are a very common way for large 102 00:04:19,880 --> 00:04:23,120 Speaker 2: companies to raise the capital without diluting their ownership, and. 103 00:04:23,040 --> 00:04:25,720 Speaker 1: When a company issues bonds, it's essentially taking a loan 104 00:04:25,760 --> 00:04:26,359 Speaker 1: from investors. 105 00:04:26,400 --> 00:04:28,839 Speaker 2: They promised to pay interest known as coupon payments, and 106 00:04:28,920 --> 00:04:31,960 Speaker 2: eventually return the principal amount at the maturity of the bond. 107 00:04:32,000 --> 00:04:35,160 Speaker 1: And jazaweight bonds are often used to finance major acquisition. 108 00:04:35,240 --> 00:04:38,120 Speaker 2: Remember when Microsoft sold nearly twenty billion dollars worth of 109 00:04:38,120 --> 00:04:40,359 Speaker 2: bonds to fund its LinkedIn acquisition. 110 00:04:40,040 --> 00:04:43,480 Speaker 1: Or when Anheuser Busch in BEV issued forty six billion 111 00:04:43,680 --> 00:04:46,560 Speaker 1: US dollars of bonds that was to finance its acquisition 112 00:04:46,640 --> 00:04:47,760 Speaker 1: of sab Miller. 113 00:04:47,880 --> 00:04:50,840 Speaker 2: So Aman Masses already masters the chockey game, and this 114 00:04:51,000 --> 00:04:53,479 Speaker 2: bond financing will give it a serious play for the 115 00:04:53,520 --> 00:04:56,320 Speaker 2: snack throne as well. For our third and final story, 116 00:04:56,400 --> 00:04:59,640 Speaker 2: Tesla is now taking steps to launch a ride sharing service. 117 00:04:59,720 --> 00:05:03,480 Speaker 2: It could compete directly with Uber Lift and weimo. 118 00:05:03,400 --> 00:05:06,920 Speaker 1: Genuine question, is there anything Tesla won't spook at one 119 00:05:06,920 --> 00:05:09,000 Speaker 1: stage or another? Tell me more, okay? 120 00:05:09,040 --> 00:05:11,599 Speaker 2: So, Tesla is the electric car giant that was founded 121 00:05:11,600 --> 00:05:13,600 Speaker 2: in two thousand and three and launched the world's first 122 00:05:13,800 --> 00:05:15,960 Speaker 2: mass market electric vehicle, the Model three. 123 00:05:16,040 --> 00:05:18,200 Speaker 1: Now Elon Musk, one of the co founders of Tesla, 124 00:05:18,320 --> 00:05:21,479 Speaker 1: has tested everything under the sun with Tesla, from the 125 00:05:21,880 --> 00:05:25,680 Speaker 1: bulletproof cyber truck to AI powered Optimus robots. 126 00:05:25,880 --> 00:05:28,440 Speaker 2: But now, be man, he's gone one further because Tesla 127 00:05:28,480 --> 00:05:31,440 Speaker 2: has filed a charter party carrier permit in the US. 128 00:05:31,640 --> 00:05:35,200 Speaker 1: Essentially, this is a license that will allow Tesla to 129 00:05:35,279 --> 00:05:38,240 Speaker 1: own and operate a fleet of ride sharing cars and 130 00:05:38,279 --> 00:05:38,600 Speaker 1: be Man. 131 00:05:38,680 --> 00:05:41,159 Speaker 2: We know that Musk has spoken about an autonomous ride 132 00:05:41,160 --> 00:05:42,680 Speaker 2: sharing network for about ten years. 133 00:05:42,880 --> 00:05:46,000 Speaker 1: Been interestingly Jose boyit the license that they applied for 134 00:05:46,120 --> 00:05:50,120 Speaker 1: will have human drivers that is so twenty eleven, with 135 00:05:50,160 --> 00:05:52,440 Speaker 1: a plan to shift to full self driving at some 136 00:05:52,480 --> 00:05:53,640 Speaker 1: stage in the future. And be Man. 137 00:05:53,720 --> 00:05:55,960 Speaker 2: We know that Tesla's castles fell by more than forty 138 00:05:56,000 --> 00:05:57,640 Speaker 2: four percent in January this year. 139 00:05:57,520 --> 00:06:01,200 Speaker 1: And its dock price has dropped around this year, so 140 00:06:01,240 --> 00:06:01,920 Speaker 1: it's clear why. 141 00:06:01,800 --> 00:06:04,279 Speaker 2: It's trying to push into the ride sharing market. So 142 00:06:04,440 --> 00:06:05,600 Speaker 2: what is the key learning here? 143 00:06:05,640 --> 00:06:08,279 Speaker 1: When a company's core business slows down, it often needs 144 00:06:08,279 --> 00:06:10,240 Speaker 1: to find new ways to grow, grow, grow. 145 00:06:10,040 --> 00:06:12,120 Speaker 2: Think about it, by Man. Ride sharing is kind of 146 00:06:12,120 --> 00:06:13,480 Speaker 2: a natural extension for Tesla. 147 00:06:13,560 --> 00:06:15,640 Speaker 1: Well, it already has the cars, and it has brand 148 00:06:15,640 --> 00:06:18,120 Speaker 1: loyalty even if it is declining. And be Man. By 149 00:06:18,160 --> 00:06:21,080 Speaker 1: jumping into ride sharing, Tesla can build a new revenue stream, 150 00:06:21,120 --> 00:06:23,799 Speaker 1: but also begin playing around with its self driving ambition. 151 00:06:23,839 --> 00:06:24,200 Speaker 1: And be Man. 152 00:06:24,240 --> 00:06:27,200 Speaker 2: We've seen other companies like Apple expand into new industries 153 00:06:27,240 --> 00:06:29,200 Speaker 2: when their primary market's matured Yeap. 154 00:06:29,240 --> 00:06:32,960 Speaker 1: Apple moved from iPhones into services like Apple Subscriptions and 155 00:06:32,960 --> 00:06:35,800 Speaker 1: Apple TV Plus, which now makes up more than twenty 156 00:06:35,839 --> 00:06:38,400 Speaker 1: one percent of its total revenue, so it's clear that. 157 00:06:38,360 --> 00:06:40,919 Speaker 2: Tesla is planning a ride sharing service as a stepping 158 00:06:40,920 --> 00:06:43,800 Speaker 2: stone towards its autonomous taxi dream Flex Am, do you 159 00:06:43,839 --> 00:06:47,200 Speaker 2: know what your superfund returned last year on your superbalance? Well, 160 00:06:47,200 --> 00:06:49,360 Speaker 2: if you don't, there is a lot to know and 161 00:06:49,440 --> 00:06:51,360 Speaker 2: a lot to consider. We have it all covered in 162 00:06:51,400 --> 00:06:53,640 Speaker 2: the Flux Academy this month. Make sure to download the 163 00:06:53,680 --> 00:06:55,080 Speaker 2: Flux app to check it all out. 164 00:06:55,080 --> 00:06:57,600 Speaker 1: Thanks for listening, and we'll see you on Friday.