Latest / What the Flux / Domain's improved acquisition offer | Musk's xAI acquires Musk's X | Virgin Australia hits the ground running

Transcript

Domain's improved acquisition offer | Musk's xAI acquires Musk's X | Virgin Australia hits the ground running · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and a Funday the thirty
• 0:08
  Speaker 2: first of Marchy Boy.
• 0:10
  Speaker 1: We know that Donald J. Trump pushed a big crypto
• 0:12
  Speaker 1: agenda on his path back to the presidency in the US,
• 0:16
  Speaker 1: and now the labor government here in Australia seems to
• 0:19
  Speaker 1: have taken a leaf out of his book. They claim
• 0:21
  Speaker 1: there are big opportunities in the digital currency space and
• 0:24
  Speaker 1: they're looking to build a plan around it. Kind of
• 0:26
  Speaker 1: sounds like they're saying something and nothing at the same Timexam.
• 0:31
  Speaker 2: We all have people in our family or our friendship
• 0:33
  Speaker 2: group that we feel obligated to help out in tricky
• 0:35
  Speaker 2: situations around money. Setting down daries is one of the
• 0:38
  Speaker 2: key ways to maintain strong relationships in your life. In
• 0:41
  Speaker 2: the Flex app, we have a deep dive into how
• 0:43
  Speaker 2: to master money in your relationships. Make sure to download
• 0:46
  Speaker 2: the Flux app and check it all out.
• 0:47
  Speaker 1: Three delightful stories today, Juzzy Boy, let's do it for
• 0:50
  Speaker 1: our first domain has received a best and final acquisition
• 0:54
  Speaker 1: offer from digital property giant Costar, and now the decision
• 0:57
  Speaker 1: is in the hands of its major shareholder.
• 1:00
  Speaker 2: The main becoming hot property be Man. So what is
• 1:02
  Speaker 2: going on here.
• 1:02
  Speaker 1: Well, Juzzi Boy, we know that Domain is the online
• 1:05
  Speaker 1: property platform listing houses for sale and for end and
• 1:09
  Speaker 1: even doing some research in the space as well, and.
• 1:11
  Speaker 2: We've spoken a lot about the fact that Domain has
• 1:13
  Speaker 2: been playing second fiddle to the big dog, real estate
• 1:15
  Speaker 2: dot Com DOREU yep.
• 1:16
  Speaker 1: Last year, real estate dot Com data you had more
• 1:18
  Speaker 1: than ten point eight million monthly unique viewers compared.
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  Speaker 2: To Domain's seven point four million. And be man, this
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  Speaker 2: performance gap isn't just in eyeballs, but also stock price too,
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  Speaker 2: where Domain share price has been lagging behind.
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  Speaker 1: But Juzzi Boy, in February this year, Domain received an
• 1:31
  Speaker 1: acquisition offer from Costar, which is a US based property platform, but.
• 1:35
  Speaker 2: B Man, Domain played hard to get and asked Costar
• 1:38
  Speaker 2: to sweeten their deal.
• 1:39
  Speaker 1: So now Costar has made a best and final offer
• 1:43
  Speaker 1: which is forty two percent higher than Domain's previous closing
• 1:46
  Speaker 1: share price.
• 1:47
  Speaker 2: And given Nine Entertainment owns more than sixty percent of Domain,
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  Speaker 2: group nine will be the ultimate decider of whether this
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  Speaker 2: deal goes ahead or not.
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  Speaker 1: But Juzi Boy, with Nine's own business in quite a decline,
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  Speaker 1: letting go of Domain is like selling your beautifully renovated
• 2:01
  Speaker 1: high growth investment property.
• 2:03
  Speaker 2: So what is the key learning here?
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  Speaker 1: Selling off one of your highest growth assets might pad
• 2:07
  Speaker 1: your balance sheet today, but it can shrink your future.
• 2:10
  Speaker 2: You see, be man. Selling Domain will give Nine a
• 2:13
  Speaker 2: very juicy payday.
• 2:14
  Speaker 1: Yes we are talking close to one point seven billion dollars, but.
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  Speaker 2: It also leaves them with their least sexy business units remaining.
• 2:20
  Speaker 1: Yep, we'd be talking legacy media businesses like print newspapers
• 2:23
  Speaker 1: and free to AIRTV, and.
• 2:25
  Speaker 2: Really their only fast growing business would be Stand.
• 2:28
  Speaker 1: You see juz boyd. Domain makes up over half of
• 2:30
  Speaker 1: nine's market value today.
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  Speaker 2: Meaning if the sale goes through, Nine instantly becomes a
• 2:34
  Speaker 2: much smaller company with more cash.
• 2:37
  Speaker 1: And what do you think this cash might be useful?
• 2:39
  Speaker 1: It could be used to pay down debts, they might
• 2:41
  Speaker 1: use it to issue dividends to shareholders, or they.
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  Speaker 2: May choose to reinvest the money in higher growth divisions
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  Speaker 2: like Stand.
• 2:47
  Speaker 1: But without a clear reinvestment strategy, the short term cash
• 2:50
  Speaker 1: gain might not be worth the long term risks.
• 2:53
  Speaker 2: And rather than shrinking to greatness, it may lead Nine
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  Speaker 2: on a path to shrinking to nothingness.
• 2:58
  Speaker 1: For our second story, elonsks Ai firm Xai has acquired
• 3:02
  Speaker 1: his own social media platform X in a thirty three
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  Speaker 1: billion US dollar deal.
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  Speaker 2: Would love to see how the conflict of interest worked here,
• 3:09
  Speaker 2: be man, so tell me more.
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  Speaker 1: Okay so, X formerly Twitter, was acquired by Elon Musk
• 3:14
  Speaker 1: in twenty twenty two for forty four billion US dollars.
• 3:16
  Speaker 2: And be man. Since then, X has faced a pretty
• 3:19
  Speaker 2: rocky journey. He changed the name of Twitter to X.
• 3:21
  Speaker 1: He removed a bulk of the moderation team as well
• 3:24
  Speaker 1: as more than eighty percent of other staff. He lost
• 3:26
  Speaker 1: hundreds of major advertisers because of the fear that their
• 3:28
  Speaker 1: ads would appear next to unmoderated content.
• 3:31
  Speaker 2: In fact, there have been claims the value of X
• 3:33
  Speaker 2: is now under ten billion US dollars.
• 3:36
  Speaker 1: At the same time, Juzzy Boy, he was developing xai,
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  Speaker 1: which has an AI chatbot named Gorok.
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  Speaker 2: Which is supposed to be smarter, wittier, and sassia than
• 3:44
  Speaker 2: chat gpt. But now b Man Musk has tweeted that
• 3:48
  Speaker 2: Xai has acquired X, the messaging platform the thirty three
• 3:51
  Speaker 2: billion US dollars.
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  Speaker 1: Forty five bill in value, less twelve billion in debt
• 3:56
  Speaker 1: and juzzy boy, this is an all script deal that
• 3:58
  Speaker 1: supposedly values to two companies together at one hundred and
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  Speaker 1: thirteen billion US dollars.
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  Speaker 2: Very inception vibes.
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  Speaker 1: All right, So what is the key learning here?
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  Speaker 2: In private companies you can get away with moves that
• 4:09
  Speaker 2: would never fly in the public markets.
• 4:11
  Speaker 1: You see juzzy Boy. In the public markets, this type
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  Speaker 1: of all script acquisition would raise some serious governance red flags.
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  Speaker 2: Yeah, there would be potential conflicts of interest.
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  Speaker 1: Maybe some transparency issues and.
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  Speaker 2: Of course questions for regulators.
• 4:23
  Speaker 1: But in the private world, muskets to play by his
• 4:25
  Speaker 1: own rules.
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  Speaker 2: Yeah, and it's a bit reminiscent of when Adam Newman,
• 4:27
  Speaker 2: the ex We Work CEO, casually loaned himself We Works
• 4:30
  Speaker 2: company funds with no interest.
• 4:32
  Speaker 1: And then bought buildings with those funds and leads them
• 4:35
  Speaker 1: right back to We Work, of course, making millions in
• 4:37
  Speaker 1: the process.
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  Speaker 2: And be man. Remember investors freaked out about this when
• 4:40
  Speaker 2: We Work tried to go public.
• 4:42
  Speaker 1: So this acquisition isn't really a deal between two businesses.
• 4:45
  Speaker 1: It's more of a rearranging of Elon Musk's empire.
• 4:48
  Speaker 2: For our third and final story, Virgin Australia is kicking
• 4:51
  Speaker 2: off its IPO road show this week as it looks
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  Speaker 2: to list on the ASX in twenty twenty five.
• 4:56
  Speaker 1: Huge news here, juzzy boy, big bold plans from Virgin
• 4:59
  Speaker 1: Tell me ok so.
• 5:00
  Speaker 2: Virgin Australia first hit the Australian market back in two
• 5:03
  Speaker 2: thousand under the name Virgin Blue.
• 5:04
  Speaker 1: And just one year later an Set Australia collapsed and
• 5:07
  Speaker 1: Virgin Blue had pulled a Stephen Bradbury.
• 5:10
  Speaker 2: All of a sudden, it became the second largest airline
• 5:12
  Speaker 2: in Australia.
• 5:13
  Speaker 1: In twenty eleven, it changed its name to Virgin Australia
• 5:16
  Speaker 1: and it withstood the challenges from the likes of Figer
• 5:18
  Speaker 1: Airlines remember them and Jetstar and Quantas.
• 5:21
  Speaker 2: But be Man as COVID locked us all down. In
• 5:22
  Speaker 2: early twenty twenty, Virgin Australia went into administration.
• 5:25
  Speaker 1: So it was acquired by a private equity giant named
• 5:28
  Speaker 1: Bain Capital for seven hundred million bucks alongside more than
• 5:31
  Speaker 1: five billion dollars in.
• 5:32
  Speaker 2: Debt and be Man. Since then, Virgin Australia has had
• 5:35
  Speaker 2: a major turnarount. It recorded earnings of more than five
• 5:38
  Speaker 2: hundred million dollars in the last financial year.
• 5:40
  Speaker 1: So now Virgin Australia is starting to prepare to go public.
• 5:44
  Speaker 2: But be man before you get too excited about a
• 5:46
  Speaker 2: new listing to the declining ASEX. This is just a
• 5:49
  Speaker 2: non deal IPO road show, got it?
• 5:51
  Speaker 1: So what is the key learning here?
• 5:53
  Speaker 2: A non deal road show is basically a warm up
• 5:55
  Speaker 2: lop before the real IPO race begins.
• 5:58
  Speaker 1: Yeah, it's not necessarily about sell shares just yet. It's
• 6:01
  Speaker 1: about getting investors familiar with the business as well as
• 6:03
  Speaker 1: it's new CEO. It's about building bars and excitement for
• 6:07
  Speaker 1: that public listing.
• 6:08
  Speaker 2: Companies use non deal road shows as a way to
• 6:10
  Speaker 2: test the waters with investors.
• 6:12
  Speaker 1: They can learn what investors are thinking and use it
• 6:14
  Speaker 1: to polish their pitch.
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  Speaker 2: And they can do all of this without committing to
• 6:17
  Speaker 2: evaluation of the company or a timeline for the listing.
• 6:20
  Speaker 1: So how much all we think in for Virgin Australia's IPO,
• 6:23
  Speaker 1: We'll be man.
• 6:24
  Speaker 2: It's rumored to be expected. It's rumored to be between
• 6:26
  Speaker 2: two billion dollars and three billion dollars.
• 6:29
  Speaker 1: And as we know, Qatar Airways acquired a twenty five
• 6:31
  Speaker 1: percent stake in Virgin Australia or a rumored seven hundred
• 6:34
  Speaker 1: and fifty mil Like.
• 6:35
  Speaker 2: If you run the mass, that's a three billion dollar valuation.
• 6:37
  Speaker 1: And you can bet that will be one of the
• 6:39
  Speaker 1: key questions from investors as part of this non deal
• 6:42
  Speaker 1: road shop.
• 6:42
  Speaker 2: Flux Fam Well, money's all around us. Money conversations happen
• 6:45
  Speaker 2: a lot less, so if you're struggling with ways to
• 6:47
  Speaker 2: discuss money with your partner, your friends, your family, we
• 6:50
  Speaker 2: have it all covered in the Flux apps. Make sure
• 6:52
  Speaker 2: to download the Flux app and check it all out.
• 6:54
  Speaker 1: Thanks for listening and we'll see you on Wednesday.