WEBVTT - AMP's crypto investment | Adobe's price plummet | Foxtel's new owner?

0:00:05.240 --> 0:00:06.640
<v Speaker 1>This is what the flux.

0:00:06.720 --> 0:00:10.320
<v Speaker 2>I'm Brett now justin and its Monday, the sixteenth of December.

0:00:09.960 --> 0:00:12.760
<v Speaker 1>Jesse Wait Westpac reckons that cost of living challenges may

0:00:12.800 --> 0:00:15.360
<v Speaker 1>have hit their peak and now things are getting easier

0:00:15.360 --> 0:00:18.560
<v Speaker 1>at all. That's because the number of mortgage customers experiencing

0:00:18.600 --> 0:00:21.640
<v Speaker 1>hardship hit a high of nearly twenty thousand customers in

0:00:21.760 --> 0:00:24.599
<v Speaker 1>June and it reduced to seventeen and a half thousand

0:00:24.680 --> 0:00:27.560
<v Speaker 1>in November. Whack. On top of that, consumer sentiment at

0:00:27.560 --> 0:00:29.480
<v Speaker 1>its highest level in two and a half years, and

0:00:29.640 --> 0:00:32.479
<v Speaker 1>everything is coming up or Westpac.

0:00:32.200 --> 0:00:36.120
<v Speaker 2>Except for their financial results. We've absolutely loved being in

0:00:36.159 --> 0:00:38.360
<v Speaker 2>your ears while you make coffee, jump on the train,

0:00:38.520 --> 0:00:40.680
<v Speaker 2>or even pump some iron this year. But this will

0:00:40.720 --> 0:00:42.800
<v Speaker 2>be our last week of the pod for twenty twenty four.

0:00:42.840 --> 0:00:45.880
<v Speaker 2>Don't worry. We'll be back fit and firing on January twentieth,

0:00:45.960 --> 0:00:47.920
<v Speaker 2>twenty twenty five. But if you're craving a little bit

0:00:47.920 --> 0:00:50.160
<v Speaker 2>of flux in your life over that period, don't worry,

0:00:50.159 --> 0:00:52.640
<v Speaker 2>because the flux app ain't going nowhere. There's plenty of

0:00:52.640 --> 0:00:55.640
<v Speaker 2>business use finance courses and budgeting tools to keep you

0:00:55.680 --> 0:00:58.040
<v Speaker 2>occupied over the lonely summer months.

0:00:58.080 --> 0:01:02.080
<v Speaker 1>Three refreshing stories TODAYI boy, let's do it for our first.

0:01:02.200 --> 0:01:06.240
<v Speaker 1>AMP has become the first major super fund to invest

0:01:06.280 --> 0:01:09.840
<v Speaker 1>in crypto after investing twenty seven million dollars into bitcoin.

0:01:09.920 --> 0:01:11.120
<v Speaker 2>I want to be the fly on the wall for

0:01:11.160 --> 0:01:13.600
<v Speaker 2>that investment, manager's pitched to the investment committee. Be man,

0:01:13.640 --> 0:01:14.600
<v Speaker 2>so tell me more, all right.

0:01:14.560 --> 0:01:18.360
<v Speaker 1>Jazi boy. AMP is one of Australia's oldest financial services companies.

0:01:18.480 --> 0:01:21.000
<v Speaker 2>It was founded in eighteen forty nine and actually stands

0:01:21.000 --> 0:01:24.959
<v Speaker 2>for Australian Mutual Provident Society. Very sexy night.

0:01:25.520 --> 0:01:29.000
<v Speaker 1>And right now. AMPS around fifty seven billion dollars worth

0:01:29.000 --> 0:01:30.640
<v Speaker 1>of super assets under management.

0:01:30.920 --> 0:01:33.280
<v Speaker 2>So now they thought, why not give bitcoin a bit

0:01:33.280 --> 0:01:33.760
<v Speaker 2>of a whirl?

0:01:33.959 --> 0:01:35.920
<v Speaker 1>Yeah, well they just announced the investment.

0:01:35.959 --> 0:01:36.240
<v Speaker 2>Now.

0:01:36.360 --> 0:01:39.480
<v Speaker 1>They had invested twenty seven million into bitcoin back in

0:01:39.560 --> 0:01:40.240
<v Speaker 1>May when.

0:01:40.040 --> 0:01:42.640
<v Speaker 2>The price was sixty to seventy thousand US dollars.

0:01:42.720 --> 0:01:45.720
<v Speaker 1>This is interesting because other super funds like Australian Super

0:01:45.840 --> 0:01:49.920
<v Speaker 1>and Australian Retirement Trust have specifically dismissed crypto investments.

0:01:49.960 --> 0:01:52.640
<v Speaker 2>Yeah, they reckon crypto is just too volatile for.

0:01:52.600 --> 0:01:54.840
<v Speaker 1>Super funds and doesn't offer a yield.

0:01:54.920 --> 0:01:57.280
<v Speaker 2>And they man this step by AMP and the thirty

0:01:57.280 --> 0:02:00.280
<v Speaker 2>percent uplift in bitcoin so far might just drive other

0:02:00.320 --> 0:02:03.320
<v Speaker 2>super funds to dip their toes in the crypto waters too.

0:02:03.400 --> 0:02:05.120
<v Speaker 1>Mm so what is the key learning here?

0:02:05.200 --> 0:02:08.639
<v Speaker 2>Crypto can't be called a fringe asset class anymore, especially

0:02:08.639 --> 0:02:12.000
<v Speaker 2>when traditionally cautious industries like super funds are getting in

0:02:12.080 --> 0:02:12.960
<v Speaker 2>on the autiboy.

0:02:13.120 --> 0:02:16.840
<v Speaker 1>Let's be real here. AMP only allocated a tiny portion

0:02:16.919 --> 0:02:18.800
<v Speaker 1>of its investment portfolio into bitcoin.

0:02:18.880 --> 0:02:21.520
<v Speaker 2>Yeah, we're talking just point zero five percent, so it's

0:02:21.520 --> 0:02:24.120
<v Speaker 2>not meaningful from a risk perspective. And then, man, might

0:02:24.120 --> 0:02:27.240
<v Speaker 2>I remind you that historically Australian super funds were hesitant

0:02:27.240 --> 0:02:28.880
<v Speaker 2>to invest in venture capital two.

0:02:28.760 --> 0:02:30.920
<v Speaker 1>Yep, they thought the risk were too high and the

0:02:30.960 --> 0:02:32.040
<v Speaker 1>funds were illiquid.

0:02:32.040 --> 0:02:34.639
<v Speaker 2>But in twenty fourteen, host Plass made its first investment

0:02:34.680 --> 0:02:36.639
<v Speaker 2>in the VC space, where they happened to invest in

0:02:36.680 --> 0:02:39.440
<v Speaker 2>a range of funds and a small little startup called Canvas.

0:02:39.680 --> 0:02:42.200
<v Speaker 1>This grew from a ninety four million dollar investment to

0:02:42.400 --> 0:02:44.760
<v Speaker 1>over one point nine billion dollars in value.

0:02:44.480 --> 0:02:46.920
<v Speaker 2>And since then other super funds like Australian Super and

0:02:47.000 --> 0:02:50.400
<v Speaker 2>HESTER have also invested in vcs and directly into startups. Two.

0:02:50.480 --> 0:02:53.560
<v Speaker 1>So Jazi boy, While AMP is the first major super

0:02:53.600 --> 0:02:56.600
<v Speaker 1>fund to invest in crypto. The changing landscape makes me

0:02:56.720 --> 0:02:59.960
<v Speaker 1>think it may not be the last for our set.

0:03:00.000 --> 0:03:03.480
<v Speaker 1>Second story, Adobe has seen at share price plummet after

0:03:03.520 --> 0:03:08.080
<v Speaker 1>concerns its AI tools aren't being monetized as fast as expected.

0:03:08.200 --> 0:03:10.079
<v Speaker 2>Now you can just hear the dramatic music in the

0:03:10.120 --> 0:03:13.720
<v Speaker 2>bodroom as the competitors creep up um tell me.

0:03:13.680 --> 0:03:16.760
<v Speaker 1>Well, well, josy boy, Adobe is the design software powerhouse

0:03:16.760 --> 0:03:20.440
<v Speaker 1>behind Photoshop, Illustrator and Premiere pro Man.

0:03:20.520 --> 0:03:23.840
<v Speaker 2>Don't forget Adobe actually created the PDF format back in

0:03:23.880 --> 0:03:25.000
<v Speaker 2>the nineties, Is.

0:03:24.960 --> 0:03:26.800
<v Speaker 1>That correct, josy boy, little expert.

0:03:27.160 --> 0:03:29.880
<v Speaker 2>But you didn't know you'd be thanking Adobe every single

0:03:29.919 --> 0:03:30.840
<v Speaker 2>time you open a file.

0:03:31.000 --> 0:03:33.679
<v Speaker 1>But gone of the days when designers couldn't live without Adobe,

0:03:33.720 --> 0:03:36.760
<v Speaker 1>because hello Canva, and hello Figma, and a whole lot

0:03:36.760 --> 0:03:37.760
<v Speaker 1>of other competitors too.

0:03:37.840 --> 0:03:39.880
<v Speaker 2>And now, b man, Adobe stock has dropped by more

0:03:39.920 --> 0:03:43.720
<v Speaker 2>than thirteen percent because it released weaker than expected revenue projection.

0:03:43.960 --> 0:03:47.720
<v Speaker 1>You see, Adobe released a new AI tool called Firefly

0:03:47.960 --> 0:03:49.800
<v Speaker 1>in March of twenty twenty three, and.

0:03:49.760 --> 0:03:52.760
<v Speaker 2>Well, Camva's been catching up to Adobe's traditional design suite.

0:03:52.760 --> 0:03:55.760
<v Speaker 2>Adobe was saying we're way ahead because check out our

0:03:55.800 --> 0:03:58.560
<v Speaker 2>fancy AI, but b Man Not only have Adobe struggled

0:03:58.560 --> 0:04:01.640
<v Speaker 2>to grow the AI product, and even Google have released

0:04:01.640 --> 0:04:04.200
<v Speaker 2>their own AI design offering too check. On top of that,

0:04:04.280 --> 0:04:07.680
<v Speaker 2>new players like Stability, AI, mid Journey and Runway, and

0:04:07.720 --> 0:04:10.640
<v Speaker 2>investors are kind of concerned that Adobe might not find

0:04:10.640 --> 0:04:12.440
<v Speaker 2>a way to actually monetize this product.

0:04:12.640 --> 0:04:14.040
<v Speaker 1>So what is the key learning here?

0:04:14.080 --> 0:04:16.560
<v Speaker 2>After more than two years in the market, AI is

0:04:16.600 --> 0:04:19.719
<v Speaker 2>now seen as a baseline expectation for software companies rather

0:04:19.920 --> 0:04:21.920
<v Speaker 2>than a unique selling point For Adobe.

0:04:21.960 --> 0:04:24.640
<v Speaker 1>This means that having AI features like Firefly is not

0:04:24.880 --> 0:04:25.360
<v Speaker 1>enough yet.

0:04:25.400 --> 0:04:27.599
<v Speaker 2>The challenge for Adobe is they haven't yet been able

0:04:27.640 --> 0:04:30.640
<v Speaker 2>to truly monetize their AI functionality.

0:04:30.040 --> 0:04:32.560
<v Speaker 1>Which it promised to be a game changer factory Man.

0:04:32.600 --> 0:04:35.240
<v Speaker 2>Adobe's R and D expenses hit two point six billion

0:04:35.320 --> 0:04:38.600
<v Speaker 2>US dollars for the nine months ending September twenty twenty three, with.

0:04:38.600 --> 0:04:41.200
<v Speaker 1>The bulk going into the AI development and right now

0:04:41.240 --> 0:04:44.279
<v Speaker 1>investors are getting tired of waiting, so it's not surprising

0:04:44.560 --> 0:04:47.560
<v Speaker 1>that Adobe share price has been whacked.

0:04:48.040 --> 0:04:51.360
<v Speaker 2>For our third and final story, Foxtell is looking more

0:04:51.360 --> 0:04:53.800
<v Speaker 2>and more likely to be sold as execs from a

0:04:53.800 --> 0:04:56.599
<v Speaker 2>British sports platform meet with the Fox Dog team to

0:04:56.680 --> 0:04:58.400
<v Speaker 2>sign on the dotted line.

0:04:58.120 --> 0:05:00.800
<v Speaker 1>As your favorite pop star Jessejson as Juzzy Boy. It

0:05:00.880 --> 0:05:03.200
<v Speaker 1>is all about the price tag. So what is going

0:05:03.200 --> 0:05:03.560
<v Speaker 1>on here?

0:05:03.680 --> 0:05:06.279
<v Speaker 2>So man back into today. Foxtel was the go to

0:05:06.560 --> 0:05:07.760
<v Speaker 2>PTV source.

0:05:07.640 --> 0:05:11.760
<v Speaker 1>Your Fox eightsy comedy channel, cartoon network, anyone, back when.

0:05:11.640 --> 0:05:14.120
<v Speaker 2>The likes of Netflix and YouTube and TikTok bare existed

0:05:14.200 --> 0:05:15.400
<v Speaker 2>or didn't exist at all.

0:05:15.279 --> 0:05:18.440
<v Speaker 1>But Juzzy Boy. Since these competitors stepped in, Foxteale subscriber

0:05:18.480 --> 0:05:20.760
<v Speaker 1>numbers have been rapidly declining.

0:05:20.279 --> 0:05:22.040
<v Speaker 2>Particularly over the past five years.

0:05:22.160 --> 0:05:24.480
<v Speaker 1>In fact, there are now only one point four million

0:05:24.560 --> 0:05:26.840
<v Speaker 1>paying Fox Steale subscribers in Australia today.

0:05:26.880 --> 0:05:29.159
<v Speaker 2>And that's why Foxdale rolled our Ko for sport, Binge

0:05:29.160 --> 0:05:30.480
<v Speaker 2>for movies, Flash for news.

0:05:30.520 --> 0:05:35.120
<v Speaker 1>But now the joint is Foxtel, News Corp and Telstra.

0:05:35.279 --> 0:05:38.359
<v Speaker 1>They won out and now a British streaming platform called

0:05:38.640 --> 0:05:41.920
<v Speaker 1>Dezone spelt d a z N is in the box

0:05:41.960 --> 0:05:45.040
<v Speaker 1>seat to buy foxtell. Given previous acquisition talks fell over

0:05:45.080 --> 0:05:47.240
<v Speaker 1>because of price, it seems like News Corp may be

0:05:47.240 --> 0:05:49.240
<v Speaker 1>willing to compromise a little bit more now.

0:05:49.120 --> 0:05:52.640
<v Speaker 2>Because the window to receive a fair return is quickly closing.

0:05:52.920 --> 0:05:54.520
<v Speaker 1>Yeah, so what is the key learning here.

0:05:54.560 --> 0:05:57.960
<v Speaker 2>When evaluating whether to sell, a declining company's owners face

0:05:58.040 --> 0:06:01.360
<v Speaker 2>a classic dilemma, cling to pass valuations or accept a

0:06:01.440 --> 0:06:03.520
<v Speaker 2>deal that reflects today's reality.

0:06:03.560 --> 0:06:07.039
<v Speaker 1>Fox Sale's previous dominance in PATV created a high standard

0:06:07.040 --> 0:06:07.800
<v Speaker 1>for its valuation.

0:06:07.960 --> 0:06:10.800
<v Speaker 2>But here's a thing. Dominance in PATV is pretty worthless

0:06:10.800 --> 0:06:13.279
<v Speaker 2>today and even more so in the future.

0:06:13.160 --> 0:06:16.640
<v Speaker 1>So clinging to that previous success can lead to overestimating

0:06:16.640 --> 0:06:18.240
<v Speaker 1>its worth in today's market.

0:06:18.000 --> 0:06:19.960
<v Speaker 2>And the man let's not forget back. In twenty twenty,

0:06:20.000 --> 0:06:23.000
<v Speaker 2>a US cable entrepreneur offered two billion US sellers for

0:06:23.040 --> 0:06:24.520
<v Speaker 2>Foxtel and it was rejected.

0:06:24.680 --> 0:06:27.839
<v Speaker 1>And now McQuary group's research team reckons Foxtel is valued

0:06:27.839 --> 0:06:30.640
<v Speaker 1>at around seven hundred and thirty million dollars much so.

0:06:31.000 --> 0:06:32.800
<v Speaker 2>It looks like fox sell may need to take this

0:06:32.920 --> 0:06:36.400
<v Speaker 2>deal from deown and run buck day. Just a quick reminder,

0:06:36.440 --> 0:06:38.520
<v Speaker 2>we'll be wrapping up this Friday for the rest of

0:06:38.560 --> 0:06:40.279
<v Speaker 2>the year, but if you want all the action, it

0:06:40.360 --> 0:06:42.520
<v Speaker 2>is going all into the Flux app. There's plenty of

0:06:42.520 --> 0:06:45.359
<v Speaker 2>business news, finance courses, and budgeting tools to keep you

0:06:45.440 --> 0:06:47.640
<v Speaker 2>busy over the summer period. To make sure to download

0:06:47.680 --> 0:06:48.880
<v Speaker 2>the Flux app and check it all

0:06:48.920 --> 0:06:51.760
<v Speaker 1>Out, Thanks for listening, and we'll see you on Wednesday.