Latest / What the Flux / Canva's major AI acquisition | Rex Airlines hits turbulence | Maccas hurt by its expensive burgers

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Canva's major AI acquisition | Rex Airlines hits turbulence | Maccas hurt by its expensive burgers · What the Flux

• 0:05
  Speaker 1: This is what the Flux. I'm Brett and Justin and
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  Speaker 1: it's Wednesday, the thirty first of July.
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  Speaker 2: Juzzy Boy, it's easy, Come, easygo for Carl's Junior, the
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  Speaker 2: American burger restaurant that hit Aussie shaws in twenty sixteen,
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  Speaker 2: and they announced plans to open three hundred stores back then. Sadly,
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  Speaker 2: the company has placed its Australian stores into voluntary administration
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  Speaker 2: after quite a fullback in consumer spending.
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  Speaker 1: Now, flex Fam. If the words taxable income, accessible income,
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  Speaker 1: capital gains tax, if they give you shivers, there is
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  Speaker 1: one place, and it is in the Flux Academy. This
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  Speaker 1: month we take you through the FY twenty four tax
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  Speaker 1: download the Flux out and check out the Academy this month.
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  Speaker 2: Three refreshing stories Today, Juzzy Boy, Let's do it for
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  Speaker 2: our first Canvas has announced that it will acquire AI
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  Speaker 2: startup Leonardo Ai in a big deal for Australia's startup ecosystem.
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  Speaker 1: Jeez, Camera's going hard on its aap man, So tell
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  Speaker 1: me what's going on here?
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  Speaker 2: Well, Jazi boy. We know Canvas as the design software
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  Speaker 2: company that's become Australia's golden child.
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  Speaker 1: Yep, that's thanks to its forty billion dollar evaluation and
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  Speaker 1: one hundred and eighty million monthly active users.
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  Speaker 2: Now, Canvas has announced that it will acquire Leonardo Ai,
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  Speaker 2: an AI startup which is also based in Australia.
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  Speaker 1: And what does this Leonardo do well?
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  Speaker 2: Leonardo is an image generation company that started actually in
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  Speaker 2: the gaming industry, but since then has expanded to other
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  Speaker 2: industries like film and even architecture.
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  Speaker 1: Okay, be man, cut to the chase. How much did
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  Speaker 1: they pay for it?
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  Speaker 2: Well, Juzi boy, I did some snooping around and the
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  Speaker 2: result is an undisclosed amount.
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  Speaker 1: Canva being a little bit secretive there.
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  Speaker 2: Yeah, Well, what we do know is that Leonardo AI
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  Speaker 2: raised forty seven million bucks last year and has tripled
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  Speaker 2: its users since then to nineteen million monthly active It's
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  Speaker 2: been called the.
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  Speaker 1: Next Canva with how rapidly its user base is growing.
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  Speaker 2: But rather than battling head to head, the two companies
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  Speaker 2: have officially joined forces.
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  Speaker 1: And this merger out will give Canva exclusive access to
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  Speaker 1: Leonardo AI's technology to improve its own.
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  Speaker 2: Set of AI tools. Good call, Jazi boy. So what's
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  Speaker 2: the key learning here?
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  Speaker 1: If you can't beat them, buy them.
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  Speaker 2: This acquisition is a strategic way for Canvas to level
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  Speaker 2: up its own AI game muchure faster.
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  Speaker 1: Yeah, this deal gives Campa access to Leonardo AI's tech.
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  Speaker 1: It also gives them access to its IP, its team
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  Speaker 1: of AI experts, and gives them access to the future
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  Speaker 1: tech that it will build. Now and we know that
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  Speaker 1: acquisitions have been a big part of canvas growth story
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  Speaker 1: so far.
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  Speaker 2: Yep, Leonardo AI will be canvas eighth are repeat eight
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  Speaker 2: acquisitions since twenty eighteen, and.
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  Speaker 1: It's not the only tech company using the old buy
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  Speaker 1: overbuild strategy to get ahead in AI. Get this be man.
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  Speaker 1: Apple has purchased more than twenty AI startups since twenty seventeen,
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  Speaker 1: and Microsoft and Meta have purchased more than ten as well.
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  Speaker 2: Wow, so Canvas inched ahead with its new acquisition, But
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  Speaker 2: the AI race well and truly continues.
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  Speaker 1: For our second story, Rex Airlines shares are in a
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  Speaker 1: trading hole as it tries to find a way to
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  Speaker 1: stay out of administration.
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  Speaker 2: First it was Bonza and now REXI Rex as well.
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  Speaker 2: So tell me what's going on here? Juzzy boy I.
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  Speaker 1: So REX, or it's full name, Regional Express, launched back
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  Speaker 1: in two thousand and two as an airline specialized in
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  Speaker 1: regional routes around Australia.
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  Speaker 2: We're talking Cans to Townsville or Broken Hill to Dubbo.
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  Speaker 1: Don't forget Bernie to King Island as well and.
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  Speaker 2: Josey boy Well. REX listed on the ASX in two
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  Speaker 2: thousand and five. It really became prominent in Australia during
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  Speaker 2: COVID times.
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  Speaker 1: And that's because in twenty twenty one, REX expanded its
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  Speaker 1: flying roots to include the Golden Triangle of Australia. That
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  Speaker 1: would be flights between Melbourne, Sydney and Brisbane, which are
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  Speaker 1: the busiest routs in Australia, and then Man. When Virgin
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  Speaker 1: Australia went into voluntary administration in twenty twenty, REX saw
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  Speaker 1: its opportunity to own a big chunk of these roots.
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  Speaker 2: So Rex borrowed one hundred and fifty mil in convertible
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  Speaker 2: notes from a private equity firm which goes by the
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  Speaker 2: name of PAG and.
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  Speaker 1: Then Man and now it's time to pay back PAG.
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  Speaker 2: And this is a worry for REX, which recently has
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  Speaker 2: had major board disputes and has now gone into a
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  Speaker 2: trading hole.
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  Speaker 1: In fact, they've paused any bookings on New Fly for.
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  Speaker 2: The next two weeks, all part of Rex's plans to
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  Speaker 2: hopefully avoid going into voluntary administration.
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  Speaker 1: So tell me what is the key learning here.
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  Speaker 2: Convertible notes are short term loans that convert into equity
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  Speaker 2: at a predetermined conversion event and be Man. This predetermined
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  Speaker 2: event that you speak of could be a whole range
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  Speaker 2: of things. It might be the sale of the company
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  Speaker 2: or an IPO.
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  Speaker 1: It might be if specific performance targets are met, but
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  Speaker 1: often it's at a specific date called the maturity date.
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  Speaker 1: And be Man, the original amount lent plus any interest
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  Speaker 1: will convert into equity.
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  Speaker 2: So juzy boy, it's unclear if or when PAG will
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  Speaker 2: convert these shares.
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  Speaker 1: And b Man. Sadly, Rex ain't the first Ossie airline
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  Speaker 1: to struggle under the weight of their debts. No, we know.
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  Speaker 2: Bonds A fell earlier this year, Virgin Australia fell during
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  Speaker 2: COVID but is back, and of course Tiger Air.
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  Speaker 1: For our third and final story, McDonald's sales have fallen
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  Speaker 1: for the first time in thirteen quarters because apparently Macu's
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  Speaker 1: big max are pricing people out of the fast food market.
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  Speaker 2: I reckon, Juzzi boy. The secret to success is just
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  Speaker 2: making sure the ice cream machines are actually working at McDonald's.
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  Speaker 1: Tell me more. Okay, So MACI D's is the home
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  Speaker 1: of all comfort foods. You're salty Salty Chips, you're big Macburgers,
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  Speaker 1: you Mcflurri's.
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  Speaker 2: And don't you forget the home of Ronald McDonald, who's
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  Speaker 2: actually I think been killed off by the Macas marketing
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  Speaker 2: team in reason.
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  Speaker 1: Is interesting, true, but the man, comfort food and fast
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  Speaker 1: food apparently comes at a pretty hefty cost these days.
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  Speaker 2: Macas reported that global sales fell one percent in the
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  Speaker 2: second quarter of this year, and the man, it's the
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  Speaker 2: first quarter in over three years that it's gone backwards.
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  Speaker 1: So what's been the cause of this downfall? The biggest
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  Speaker 1: hip for Macas has been low income consumers who have
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  Speaker 1: cut back on their Macas visits.
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  Speaker 2: But there is some good news. It's five dollars meal
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  Speaker 2: deals have sold above expectations.
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  Speaker 1: So now Macas is going to lean back into its
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  Speaker 1: value deals to bring back its customers. Interesting, So, what
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  Speaker 1: is the key learning when you stray too far from
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  Speaker 1: your winning playbook? You're risk losing your competitive edge, Douzy boy.
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  Speaker 2: We know that Macas has always positioned itself as good
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  Speaker 2: quality taste wise and good value money wise.
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  Speaker 1: In fact, be man During previous economic downturns, Mac's has
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  Speaker 1: actually brought in more customers.
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  Speaker 2: But over the past few years, with the rise of
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  Speaker 2: raw material costs, mac has significantly increased its prices.
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  Speaker 1: Get this, the average prices of Big Mac in the
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  Speaker 1: US is up twenty one percent since twenty nineteen.
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  Speaker 2: Or the price of French fries here in Australia, which
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  Speaker 2: I've been keeping my eye on, up fifty percent since
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  Speaker 2: twenty nineteen, Josie Boy.
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  Speaker 1: And as a result, for some Macus has actually lost
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  Speaker 1: its reputation for value as well as its customers.
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  Speaker 2: Many low income customers are heading to other fast food
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  Speaker 2: chains like Burger King or Domino's.
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  Speaker 1: Yep, burging scene at sales grow by leaning on the
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  Speaker 1: Macca's value playbook.
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  Speaker 2: So now Jusiboy, Maccas is scrambling madly to create new
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  Speaker 2: value deals so it can bring back dem customers.
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  Speaker 1: Flux iam Max time is one of the most confusing
• 6:43
  Speaker 1: and kind of painful times of the year. We actually
• 6:45
  Speaker 1: need to know what you're doing. We have it all
• 6:47
  Speaker 1: covered in the Flux app with the FI twenty four
• 6:49
  Speaker 1: tax toolkits. Make sure you download the app and check
• 6:51
  Speaker 1: it all out.
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  Speaker 2: Thanks for listening, and we'll see you on Friday.