Latest / What the Flux / Telstra jacks up prices | Saks 5th Avenue x Amazon acquisition | Paramount's mega-merger

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Telstra jacks up prices | Saks 5th Avenue x Amazon acquisition | Paramount's mega-merger · What the Flux

• 0:05
  Speaker 1: This is what the flux I'm brad, I'm justin and
• 0:08
  Speaker 1: it's Wednesday, the tenth of July.
• 0:09
  Speaker 2: The way we spoke about Nine Entertainments and major staff
• 0:12
  Speaker 2: cuts the other week, but now it's cut even deeper.
• 0:14
  Speaker 2: Nine has announced that it's restructuring its pedestrian business, meaning
• 0:18
  Speaker 2: brands like Vice, Refinery, twenty nine, giz Modo Live Hack App.
• 0:22
  Speaker 2: It will all be cut in the coming month.
• 0:24
  Speaker 1: Of yikes, there is serious paine out there be man
• 0:27
  Speaker 1: in good news though, Flex out. This is the final
• 0:29
  Speaker 1: day that you can get Flux Pro for fifty percent off.
• 0:31
  Speaker 1: That's the Flux app with all its dance features. We're
• 0:34
  Speaker 1: talking advanced budgeting, advance credit score, premium articles, all for
• 0:38
  Speaker 1: fifty percent off its normal price. To make sure to
• 0:40
  Speaker 1: kick off the new financial year on a high and
• 0:42
  Speaker 1: hit the link in the show notes to get.
• 0:44
  Speaker 2: Access three bargain basement price stories today. Juzzy boy, let's
• 0:48
  Speaker 2: do it for our first. Telstra will be jacking up
• 0:51
  Speaker 2: the prices of its mobile phone plans by more than
• 0:54
  Speaker 2: the inflation rate as part of its plans to grow faster.
• 0:57
  Speaker 1: Telstra making some serious moves lately. So what is going
• 1:00
  Speaker 1: on here? Well, juzzy Boy.
• 1:02
  Speaker 2: Telstra is the largest mobile network operator in Australia with
• 1:05
  Speaker 2: over twenty two and a half million or retail mobile services,
• 1:08
  Speaker 2: nearly one.
• 1:09
  Speaker 1: Mobile service for every single autult teen and infants in
• 1:12
  Speaker 1: the whole of Australia.
• 1:13
  Speaker 2: You might remember back in May, Telstra announced that it
• 1:15
  Speaker 2: would completely restructure its business, including cutting up to twenty.
• 1:18
  Speaker 1: Eight hundred jobs by the end of this year.
• 1:20
  Speaker 2: Now, over the past two years, juzzy Boy Telstra has
• 1:23
  Speaker 2: been increasing its mobile phone plans in line with inflation.
• 1:26
  Speaker 1: But be man, during that big announcement in May, they
• 1:28
  Speaker 1: warned that increasing prices with inflation was a thing of
• 1:31
  Speaker 1: the past. I really wanted flexibility, you meaning like two
• 1:34
  Speaker 1: months later, because now Telstra's announced its mobile phone plans
• 1:38
  Speaker 1: will increase by four to five percent at a minimum,
• 1:40
  Speaker 1: and that's across its og Telstra brand, but also its
• 1:43
  Speaker 1: cheaper brand Boost and b Man. Well, customers weren't quite
• 1:46
  Speaker 1: doing the happy dands. Investors most certainly were.
• 1:49
  Speaker 2: Telstra shares jump two and a half percent to their
• 1:51
  Speaker 2: highest level since April.
• 1:53
  Speaker 1: So what is the key learning here?
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  Speaker 2: When you're looking to grow your profit, there are only
• 1:57
  Speaker 2: a couple of levers that can make a big difference
• 1:59
  Speaker 2: to a company.
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  Speaker 1: On the one hand, a company can look to reduce
• 2:02
  Speaker 1: their costs.
• 2:03
  Speaker 2: Like what Telster has done with their major job cuts.
• 2:06
  Speaker 1: And their cuts to product offerings and cuts to offer
• 2:08
  Speaker 1: space that the man. If that doesn't get you to
• 2:10
  Speaker 1: the required profit and profit margin, then you need to
• 2:13
  Speaker 1: start making moves on the revenue side.
• 2:15
  Speaker 2: Too, which is why Telstra is increasing the prices on
• 2:17
  Speaker 2: its mobile phone plans by more than inflation.
• 2:20
  Speaker 1: And the man. Sadly for US consumers, Telstra aren't the
• 2:23
  Speaker 1: only ones doing this now.
• 2:24
  Speaker 2: Votaphone increased prices by between six and nine percent back
• 2:27
  Speaker 2: in January, and Optics raised prices for new customers by
• 2:30
  Speaker 2: five to six percent in May as well. For our
• 2:33
  Speaker 2: second story, Sacks fifth Avenues parent company has acquired a
• 2:37
  Speaker 2: luxury or retailer name and Marcus for two point six
• 2:40
  Speaker 2: five billion US dollars. And if you don't mind, Amazon
• 2:43
  Speaker 2: and Salesforce are taking a slice too.
• 2:45
  Speaker 1: Geez, Jeffy Bee really leaning into his fashionable slash ripped
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  Speaker 1: ear at the moment. So what is going on here,
• 2:51
  Speaker 1: jose boy?
• 2:52
  Speaker 2: If you know anything about fashion, and I mean anything,
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  Speaker 2: it's likely that you know Sacks Fifth Avenue.
• 2:57
  Speaker 1: I do, thankfully. It's the luxury department store that's feed
• 3:00
  Speaker 1: you're on Gossip Girl and Sex in the City, and
• 3:01
  Speaker 1: Will and Grace and Friends, and the list goes on.
• 3:04
  Speaker 2: The original store opened in eighteen sixty seven, if you
• 3:07
  Speaker 2: don't mind, and it's grown into forty two different locations,
• 3:10
  Speaker 2: including the USA.
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  Speaker 1: You expect that.
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  Speaker 2: Canada, you'd expect that too, And get this. Couzak'stan and b.
• 3:15
  Speaker 1: Man Name and Marcus is another luxury department store that
• 3:18
  Speaker 1: actually went bankrupt during the pandemic. It was saved by investors.
• 3:21
  Speaker 2: It always kind of made sense for these bitter rivals
• 3:24
  Speaker 2: to join forces, and now it's become reality.
• 3:26
  Speaker 1: Yep, SAX Fifth Avenue's parent company has a Quiet Name
• 3:29
  Speaker 1: and Marcus for two point sixty five billion US dollars.
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  Speaker 2: But here's the kicker, you know, just Sax's parent investing
• 3:35
  Speaker 2: in Name and Marks.
• 3:36
  Speaker 1: No, no, no no, You've always got Amazon throwing some
• 3:38
  Speaker 1: cash in Salesforce also tipping some cash into this deal
• 3:40
  Speaker 1: as well.
• 3:41
  Speaker 2: Fascinating stuff. Josey Boyce, I'm wondering what is the key
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  Speaker 2: learning here.
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  Speaker 1: There's a difference between being a luxury goods department store
• 3:47
  Speaker 1: and a luxury goods.
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  Speaker 2: Retailer objectively luxury goods. It's a great industry because of
• 3:51
  Speaker 2: its ridiculously high margin.
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  Speaker 1: For example, LVMH, the company behind Louis Bitton and Dior
• 3:56
  Speaker 1: and Fendi and many more. They have gross margins of
• 3:58
  Speaker 1: nearly seventy percent.
• 4:00
  Speaker 2: It does avoid. The challenge is that when consumer spending
• 4:02
  Speaker 2: is down, the whole industry takes.
• 4:04
  Speaker 1: A major hit, including department stores.
• 4:06
  Speaker 2: You've got online luxury retailer far Fetch that was sold
• 4:09
  Speaker 2: for a fraction of what it was previously worth because
• 4:11
  Speaker 2: it required emergency funding.
• 4:13
  Speaker 1: You've got Matches that were sold and then put into
• 4:15
  Speaker 1: administration just three months later.
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  Speaker 2: And you've got many physical department stores also shutting down
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  Speaker 2: locations at.
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  Speaker 1: The same time dmat. It just so happens that Amazon's
• 4:23
  Speaker 1: been working hard to expand into luxury fashion over the
• 4:26
  Speaker 1: past few years.
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  Speaker 2: But hasn't yet really cracked this market.
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  Speaker 1: So this investment gives us on access to luxury products,
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  Speaker 1: physical department stores, and juicy data that desperately need.
• 4:36
  Speaker 2: For our third and final story, Paramount Global, one of
• 4:40
  Speaker 2: Hollywood's oldest studios, and Skydwan's Media have agreed to merge,
• 4:44
  Speaker 2: forming a twenty eight billion US dollar company.
• 4:46
  Speaker 1: Match made in Hollywood Heaven, rsay. So what is the
• 4:49
  Speaker 1: story here?
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  Speaker 2: Well, Paramount is the global film studio and TV production
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  Speaker 2: company that's been around for almost as long as Hollywood has,
• 4:56
  Speaker 2: dating back to nineteen twelve, and it's.
• 4:57
  Speaker 1: Given us some classics like Titanic, Godfather, like Breakfast at
• 5:01
  Speaker 1: Tiffany's Seeing.
• 5:02
  Speaker 2: That One, anything more recent Juzzy Boy, don't forget the
• 5:04
  Speaker 2: most classic of all, the Shrek series. Now, Paramount was
• 5:07
  Speaker 2: put on the selling block earlier this year, with many
• 5:10
  Speaker 2: companies circling from Warner Brothers to Comcast and even Warren Buffett,
• 5:14
  Speaker 2: but now be man.
• 5:15
  Speaker 1: Paramounts announced it will merge with an independent film studio
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  Speaker 1: called sky Dance in a deal that will create a
• 5:20
  Speaker 1: twenty eight billion US dollar company.
• 5:23
  Speaker 2: The deal is twofold, as they say, d the Boy
• 5:25
  Speaker 2: First Guidance will acquire the controlling stake in Paramount for
• 5:28
  Speaker 2: two point four billion US dollar's care.
• 5:30
  Speaker 1: Then Skydans will merge with Paramount. Now.
• 5:33
  Speaker 2: Skydance has been trying to get this deal over the
• 5:35
  Speaker 2: line for a while now, and it seems like they
• 5:37
  Speaker 2: finally managed.
• 5:38
  Speaker 1: To do it yep, allegedly by sweetening Paramount's controlling owner's payout,
• 5:42
  Speaker 1: and this challenge has been all thanks to multi class shares.
• 5:46
  Speaker 1: So what is the key learning here?
• 5:48
  Speaker 2: When it comes to company shares, not all shares are
• 5:50
  Speaker 2: created equal seeb Man.
• 5:52
  Speaker 1: When company's issue shares, they often divide them into multiple
• 5:55
  Speaker 1: classes with different rights.
• 5:57
  Speaker 2: They can do this to give people like founders or
• 6:00
  Speaker 2: executives more voting power than ordinary shareholders.
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  Speaker 1: And therefore more control over the company's direction.
• 6:05
  Speaker 2: Now, in Paramount's case, the Redstone family was the controlling owner,
• 6:08
  Speaker 2: and while they.
• 6:09
  Speaker 1: Owned only five percent of Paramount stock, they controlled seventy
• 6:12
  Speaker 1: seven percent if it's votes.
• 6:14
  Speaker 2: So when it comes to accepting a deal, despite being
• 6:16
  Speaker 2: a public company, Paramount's controlling owner holds a lot of
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  Speaker 2: the decision making power and they man It's not too
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  Speaker 2: dissimilar to News Corp YEP. The Murdoch family owns around
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  Speaker 2: fourteen percent of the shares but nearly forty percent of
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  Speaker 2: the voting right.
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  Speaker 1: Which means even once the company's gone public, a lot
• 6:31
  Speaker 1: of the power can still sit with the controlling owners.
• 6:34
  Speaker 1: Fluxam it is the very last day to get fifty
• 6:36
  Speaker 1: percent off flux Pro and you don't want to be
• 6:38
  Speaker 1: regretting it tomorrow when it's back to its full price,
• 6:40
  Speaker 1: and you missed out, so make sure to hit the
• 6:42
  Speaker 1: link in the show notes to unlock that fifty percent
• 6:44
  Speaker 1: discount code.
• 6:45
  Speaker 2: Thanks for listening, and we'll see you on Friday.