WEBVTT - Chemist Warehouse's Day 1 on the ASX | Federal government to save Rex airlines | Reddit struggles without Google

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<v Speaker 1>This is what the Flux I'm Brett and I'm Justin

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<v Speaker 1>and it's Friday, the fourteenth of February.

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<v Speaker 2>Flux Family. If you've got a HEX debt and you're

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<v Speaker 2>looking to buy a home, listen to this one. The

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<v Speaker 2>federal government has given a new direction to banks which

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<v Speaker 2>will allow them to disregard HEX repayments when assessing mortgage applications,

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<v Speaker 2>and that means potential homeowners won't be punished for studying

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<v Speaker 2>at UNI as long as they plan to pay off

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<v Speaker 2>the debt in the near term. Question Marks over what

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<v Speaker 2>near term means be There many question marks. Pluxam.

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<v Speaker 1>If you are looking for a home, then there is

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<v Speaker 1>one place that will get you to the next level.

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<v Speaker 1>It's winning fifty bucks on a Friday. In the Flux

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<v Speaker 1>app will release quick sticks at a random time today

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<v Speaker 1>and if you're the first person to answer three business

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<v Speaker 1>or finance questions correctly, you'll win fifty bucks. To make

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<v Speaker 1>sure to download the Flux app and turn your notifications

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<v Speaker 1>on to win it money.

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<v Speaker 2>Three generous stories today. Juzzy Boy for our first chemist

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<v Speaker 2>warehouse officially launched on the ASX yesterday as it's mega

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<v Speaker 2>merger with Sigma Healthcare went live.

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<v Speaker 1>Now it's time for investiceing. Why pay more for the

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<v Speaker 1>share price? So tell me what'll be Man.

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<v Speaker 2>Well, Jazzi boy. We all know Chemists ware House as

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<v Speaker 2>the pharmacy with ales tighter than compression socks and the

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<v Speaker 2>jingle more catchy than hot Potato by the Wiggle. Since

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<v Speaker 2>its first store in two thousand, Chemist Warehouse has grown

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<v Speaker 2>to more than six hundred stores.

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<v Speaker 1>And be Man or Chemists Warehouse announced its plans to

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<v Speaker 1>merge with Sigma Healthcare that in December twenty twenty three.

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<v Speaker 1>Yesterday was their hard launch.

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<v Speaker 2>And chemist Warehouse sprinted from a private company to the

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<v Speaker 2>nineteenth largest on the as house.

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<v Speaker 1>We're talking to company worth around thirty two billion dollars.

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<v Speaker 2>Now for some perspective here, Chemist Warehouse is valued more

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<v Speaker 2>than Colds and more than double of Quantus and be Man.

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<v Speaker 1>With so few big name companies listing on the ACEX lately,

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<v Speaker 1>there has been a heap of buyers that have been

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<v Speaker 1>sweeping in YEP, and naturally a lot of sellers getting out,

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<v Speaker 1>in particular be Man Chemists Warehouse franchisees who collectively were

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<v Speaker 1>holding more than a third of the company pre IPO

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<v Speaker 1>and unlike the Chemists ware House founders, these franchisees shares

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<v Speaker 1>those were unescrowed.

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<v Speaker 2>So they're making a rain as the nasal spray. So

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<v Speaker 2>what is the key learning here?

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<v Speaker 1>When a company goes public or mergers with another company,

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<v Speaker 1>shareholders are often required to hold onto their shares for

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<v Speaker 1>a set period of time.

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<v Speaker 2>Now. This is called escro and it's designed to prevent

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<v Speaker 2>a flood of shares hitting the market all at.

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<v Speaker 1>Once, which could crash the share price.

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<v Speaker 2>For example, Juzzy Boy Chemist Warehouse co founders own forty

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<v Speaker 2>eight point three percent of the merged company, so.

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<v Speaker 1>If they were to sell all their shares on day one,

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<v Speaker 1>it would be way more supply of shares than demands.

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<v Speaker 2>Causing the share price to decline big time, not to

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<v Speaker 2>mention the fact that new investors would be less likely

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<v Speaker 2>to invest if they knew the founders were out on

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<v Speaker 2>day one.

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<v Speaker 1>On the other HANDO b Man Chemists ware House franchisees,

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<v Speaker 1>who earned about thirty seven and a half percent of

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<v Speaker 1>the company aren't under escrow terms.

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<v Speaker 2>And with so much interest in Chemists ware House stock,

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<v Speaker 2>many franchisees have already jumped at the chance to cash in.

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<v Speaker 2>And while the sales of franchise shares has already begun.

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<v Speaker 2>We could see even more selling in the coming week.

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<v Speaker 2>For our second story, the Federal government says it will

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<v Speaker 2>acquire REX Airlines if there isn't a buyer for the

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<v Speaker 2>airline by the end of June.

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<v Speaker 1>Alba going from Prime Minister to REX CEO. Slush Sugar

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<v Speaker 1>Daddy didn't see that on his LinkedIn profile, so John

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<v Speaker 1>me Moore.

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<v Speaker 2>Well, REX, which is short for Regional Express, has been

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<v Speaker 2>flying Australians to the farthest corner of the country since

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<v Speaker 2>two thousand and two.

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<v Speaker 1>Yeah, it's become the second largest regional airline based on

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<v Speaker 1>the number of regional destination.

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<v Speaker 2>We're talking Hubert Petty and Cans.

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<v Speaker 1>Miljura, even Monkey Mia.

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<v Speaker 2>But here's the thing. REX got a little too ambitious

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<v Speaker 2>in twenty twenty. It expanded to the big leagues, taking

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<v Speaker 2>on the Sydney Melbourne Brisbane triangle and Beeman.

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<v Speaker 1>Let's just say it was not a smooth landing.

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<v Speaker 2>But by July last year REX had hit turbulence, falling

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<v Speaker 2>into administration and scrambling for a buyer. But now be Man,

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<v Speaker 2>Rex can't even buy a bid now. As a result,

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<v Speaker 2>the Federal government has promised to acquire Rex to ensure

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<v Speaker 2>the regional flights remain operational.

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<v Speaker 1>And if that happens, it would be the first time

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<v Speaker 1>since nineteen ninety five that the Australian government has owned an.

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<v Speaker 2>Airline after sailing off Quantas.

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<v Speaker 1>So what is the key learning here?

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<v Speaker 2>When infrastructure is at risk, governments have no choice but

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<v Speaker 2>to step in and sometimes nationalize the service.

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<v Speaker 1>Awbman, might I remind you Australia has a history of

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<v Speaker 1>going the other way, which is privatizing public assets.

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<v Speaker 2>So yes, we'd be talking Quantas, Telstra, the Commonwealth Bank,

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<v Speaker 2>which were all once government owned.

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<v Speaker 1>But when a key player in a critical market fails,

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<v Speaker 1>nationalization becomes an option again.

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<v Speaker 2>And juzuboy Rex is a prime candidate for nationalization because

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<v Speaker 2>regional airlines connect remote communities around Australia and stimulate regional economy.

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<v Speaker 2>And Australia wouldn't be the first country to own or

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<v Speaker 2>partially own a national airline.

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<v Speaker 1>Singapore Airlines and New Zealand entire Ways just over majority

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<v Speaker 1>owned by their respective government.

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<v Speaker 2>And Emirates and Ediehead are entirely owned by their government,

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<v Speaker 2>so be man.

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<v Speaker 1>While the government privatized Quantus nearly thirty years ago it

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<v Speaker 1>might step back into the airline industry once again.

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<v Speaker 2>For our third and final story, reddits Stock has taken

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<v Speaker 2>a hit after its user growth missed expectations as it

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<v Speaker 2>struggles to compete with Meta and Google. A. You're telling

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<v Speaker 2>me that reddit got down voted on Wallster, I am

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<v Speaker 2>what is going on here?

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<v Speaker 1>Well?

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<v Speaker 2>Reddit is the Internet's ultimate rabbit hole, juzzy boy. It's

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<v Speaker 2>the place where people post and comment and debate literally everything.

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<v Speaker 1>Yeah, they're on nearly three and a half million subreddits.

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<v Speaker 1>They cover broad topics like finance and fitness, to some

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<v Speaker 1>very specific topics as well.

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<v Speaker 2>Like my personal favorite hashtag bread stapled two trees, where

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<v Speaker 2>people post photos of bread staple two trees.

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<v Speaker 1>What about hashtag Thomas the dank Engine where people remix

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<v Speaker 1>and share the Thomas The tank engines are now juzzweit.

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<v Speaker 2>Reddit has announced its fourth quarter results where it had

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<v Speaker 2>just under one hundred and two million daily active users,

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<v Speaker 2>but analysts.

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<v Speaker 1>Were expecting nearly one hundred and four million daily activities.

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<v Speaker 1>So question, what was the reason for this drop in active.

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<v Speaker 2>User Google's algorithm changes? Tell me more, juzzy boy.

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<v Speaker 1>Well, Reddit relies heavily on search traffic from Google.

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<v Speaker 2>All right, so when Google tweaks the rules, Reddit builds

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<v Speaker 2>it hard exactly.

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<v Speaker 1>But bit man, it isn't all bad news for Reddit

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<v Speaker 1>because even though they had slower use of growth, they

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<v Speaker 1>saw it. They saw their quarterly revenue jump seventy one percent.

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<v Speaker 1>But this is a little for Reddit and friends. That

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<v Speaker 1>reliance on one single platform can come back to bite you.

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<v Speaker 1>So what is the key leading here?

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<v Speaker 2>Platform dependency risk is when a business relies too heavily

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<v Speaker 2>on a single external platform or service provider.

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<v Speaker 1>It could be Google, could be Meta, could be Amazon

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<v Speaker 1>or other platforms that drive traffic or sales.

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<v Speaker 2>And why, oh, why, juzzy boy, your little expert, is

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<v Speaker 2>this such a big risk because a single change can

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<v Speaker 2>create drastic impacts on a company's performance, like what happened

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<v Speaker 2>to Reddit. Yeah, on some days, up to fifty percent

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<v Speaker 2>of reddits daily visitors came from Google.

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<v Speaker 1>While and so a small algorithm change or even a

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<v Speaker 1>policy update can change the fortunes of a company. Blucklam,

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<v Speaker 1>make sure to turns silent mode off Florrow, because we

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<v Speaker 1>are dropping the flux notification for quick sticks. At some

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<v Speaker 1>time during the day, you be the first person to

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<v Speaker 1>answer three business or finance questions correctly, you'll win fifty

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<v Speaker 1>bucks to kick off the weekend. To make sure to

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<v Speaker 1>download the Flux app, have your notifications turned on and.

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<v Speaker 2>Silent mode off. Thanks for listening, and we'll see you

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<v Speaker 2>on Monday.