Latest / What the Flux / Seek's $365 million write-down | Jeep owner cops multi-billion dollar EV hit | Ozempic upends The Man Shake

Transcript

Seek's $365 million write-down | Jeep owner cops multi-billion dollar EV hit | Ozempic upends The Man Shake · What the Flux

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  Speaker 1: This city is what the flux. I'm Brett and I'm
• 0:07
  Speaker 1: justin and it's Wednesday, the tenth of February. Jessy boy.
• 0:10
  Speaker 2: The Big four banks could very well become the Big
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  Speaker 2: five soon. Mcquarie Group has laid out some pretty bold
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  Speaker 2: ambitions to grow its deposit and lending business. Interesting December alone,
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  Speaker 2: Mcquarie's deposit growth was two point six times the level
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  Speaker 2: of all banks, and its lending book is growing as well.
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  Speaker 1: Your move. Big four just quietly CBA shaking in their
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  Speaker 1: yellow booties. M fox Am. We all know that the
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  Speaker 1: share markets have been going up, they've been going down,
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  Speaker 1: and there's a hell of a lot of market volatility
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  Speaker 1: at the moment. It can feel a little bit like
• 0:36
  Speaker 1: turbulence in the middle of a relaxing flight. That's why
• 0:38
  Speaker 1: in the Flex app today, we've broken down some of
• 0:40
  Speaker 1: the different asset classes that you can invest in that
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  Speaker 1: can smooth out that turbulence. So if you want to
• 0:44
  Speaker 1: learn more about a range of different asset classes, make
• 0:46
  Speaker 1: sure to download the Flex app and check it out.
• 0:48
  Speaker 2: Three delightful stories today, Dozi boy, Let's do it for
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  Speaker 2: our first Seek has written down its investment in Chinese
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  Speaker 2: jobs portal Jaopin by three hundred and sixty five million
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  Speaker 2: dollars after the company's poor.
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  Speaker 1: Performed Believe they've been toot in japins horned for a
• 1:02
  Speaker 1: little while be Man. So that's a bit disappointing. What's
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  Speaker 1: going on here? All right?
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  Speaker 2: So sikh is obviously a massive online jobs board for
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  Speaker 2: the age specific region that's been around since nineteen ninety seven.
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  Speaker 1: And get this, last financial year they processed over fifty
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  Speaker 1: eight million applications every month. That's about ten times the
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  Speaker 1: population of Sydney. But bee Man Seek doesn't just run
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  Speaker 1: these job boards. It also invests in job boards around
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  Speaker 1: the world.
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  Speaker 2: Like when they had a more than sixty percent steak
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  Speaker 2: in Chinese jobs board Jaopin.
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  Speaker 1: But be Man COVID hit China's economy and job market
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  Speaker 1: hard and it's been pretty sluggish ever since.
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  Speaker 2: So while Seeks sold down to just under twenty five
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  Speaker 2: percent steak, now it was time for Sek to take
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  Speaker 2: a good hard look at the numbers again.
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  Speaker 1: Yep. Two years ago, Seeks slashed one hundred and forty
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  Speaker 1: million dollars off Jaopin's value because of their slow growth
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  Speaker 1: and pressure from competitors, And now another three hundred and
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  Speaker 1: sixty five million dollars has been written off for the
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  Speaker 1: same reason. Ouch, that's more than two thirds of Seek's
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  Speaker 1: investment value gone just like.
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  Speaker 2: That, Yaikaruni's. These impairments have really got a hurt Seek.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: And impairment is when a company reduces the reported value
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  Speaker 2: of an asset because it's worth less than what's on
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  Speaker 2: the books.
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  Speaker 1: It's basically a reality check for a company. Huh. And
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  Speaker 1: that's exactly what happened with jaopin Man One. Impairment is rough.
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  Speaker 1: When the same asset keeps getting devalued, it usually points
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  Speaker 1: to a bit of a deeper problem.
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  Speaker 2: It's giving long term challenges. Then, aren't going away anytime soon, vibes.
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  Speaker 1: And we've seen this patterned play out before be Man yep.
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  Speaker 2: In twenty fourteen, Telstra was forced to devalue Census, the
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  Speaker 2: company behind yellow and white pages.
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  Speaker 1: Yeah, it was originally expected that Census would be valued
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  Speaker 1: between ten to twelve billion dollars, but the business kept
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  Speaker 1: getting revalued and impaired. Once it was more or less
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  Speaker 1: replaced by Google. Telstra eventually exited Census for just over
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  Speaker 1: four hundred and fifty million dollars through a pretty disappointing Zeller.
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  Speaker 2: So Jose, boy, it looks like history could be repeating itself.
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  Speaker 1: And if conditions in China don't improve soon, Jaopin could
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  Speaker 1: turn out to be a far heavier impairment and seek bargain.
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  Speaker 2: For For our second story, Stillantis, the owner of Jeep
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  Speaker 2: and Chrysler, has seen it shares plummet thirty percent after
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  Speaker 2: its mega investment in electric vehicles failed to pay off.
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  Speaker 1: Well, well, well, looks like the electric future for Stilantis
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  Speaker 1: just run out of charge, So tell me more so.
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  Speaker 2: Stilantis is the global car giant that was formed in
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  Speaker 2: twenty twenty one from the merger of Fiat Chrysler and
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  Speaker 2: PSA Group. Basically, if it has four wheels and an
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  Speaker 2: aggressive ad voiceover, Stalantis probably owns it.
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  Speaker 1: We've been talking Jeep and Chrysler, Pugo, Ram, Dodge and
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  Speaker 1: many others as well. Hi does you boy?
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  Speaker 2: Stilanda's just announced a right down of over twenty six
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  Speaker 2: billion US dollars and that is billion with a B.
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  Speaker 1: You se b man. Back in twenty twenty one, Stilantis
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  Speaker 1: announced a big push into the electric vehicle.
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  Speaker 2: Market, which sounds great until the CEO admits they overestimated
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  Speaker 2: the pace of the energy transition.
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  Speaker 1: And now it's going to cost them twenty six billion
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  Speaker 1: US dollars in ride offs and cash payments are canceled
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  Speaker 1: EV products, as well as the costs of downsizing its
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  Speaker 1: EV supply chain. So now Stilantis is doing a full blown,
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  Speaker 1: as they call it reset. Yep, it's announced a plan
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  Speaker 1: to pivot back to hybrids and traditional combustion engine But Solantis' investors,
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  Speaker 1: after hearing this news were not in a forgiving mood.
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  Speaker 1: It's share price dropped by thirty percent. So what is
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  Speaker 1: the dodge key learning here? Businesses that overinvest based on
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  Speaker 1: regulatory momentum risk getting caught if and when the politics change.
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  Speaker 1: You see Judge boy In.
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  Speaker 2: Many car makers bet big on evs when the Biden
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  Speaker 2: administration brought in strict environmental regulations.
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  Speaker 1: There were new fuel emission standards.
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  Speaker 2: Goals that fifty percent of cars would be EV's by
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  Speaker 2: twenty thirty. But then the Trump administration rolled back many
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  Speaker 2: of those emission rules, as well as the financial support
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  Speaker 2: and rebates for EV's.
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  Speaker 1: But on top of that, customer demand for EV's just
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  Speaker 1: hasn't happened in the way these brands expected.
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  Speaker 2: And sinlantas An the only ones who made a big
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  Speaker 2: bet and lost out.
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  Speaker 1: Nope. Ford just announced a nineteen point five billion US
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  Speaker 1: dollar write down on their EV related assets.
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  Speaker 2: And GM copped a six billion dollar hit after pivoting
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  Speaker 2: away from evs.
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  Speaker 1: So for now, many of these car makers are pivoting
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  Speaker 1: back to combustion and hybrid cars.
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  Speaker 2: For our third and final story, the private equity owners
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  Speaker 2: of the Man are looking to offload the company after
• 5:02
  Speaker 2: the weight loss market has been totally reshaped by GLP
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  Speaker 2: one drugs.
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  Speaker 1: The scales have well and truly shifted be men away
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  Speaker 1: from the powders. So tell me what well.
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  Speaker 2: The story starts with a former NRL player, Adam McDougall,
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  Speaker 2: who launched the Man Shake back into NT thirteen alongside
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  Speaker 2: his wife.
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  Speaker 1: Yeah. The goal was originally they helped men lose weight
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  Speaker 1: without the usual fad diets, and then they added the
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  Speaker 1: Lady Shake and the kid shake as well. The following minute,
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  Speaker 1: it was doing one hundred and twenty two million revenue
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  Speaker 1: and sold a majority steak to private equity player Pacific
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  Speaker 1: Equity Partners, which valued the company at over four hundred
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  Speaker 1: million bakarooneys, but now Pacific Equity Partners is looking to
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  Speaker 1: offload at Steak into the parent company Kranky Health, which
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  Speaker 1: owns the Man Shake, the Lady Shake and the Kid
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  Speaker 1: Shake and the Man at. Pacific Equity Partners have acknowledged
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  Speaker 1: that when they sell this business, it's probably not going
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  Speaker 1: to be worth the same amount they invested out. Why
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  Speaker 1: is that juddy boy? One word GLP one's is cutting.
• 5:56
  Speaker 1: They're powdered shake lunch. Very good word that word? So
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  Speaker 1: what is the key? Learn? The biggest threat to your
• 6:01
  Speaker 1: business often doesn't look like you you see.
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  Speaker 2: Companies often think competition comes from other companies making similar products,
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  Speaker 2: but more and more we're seeing disruption come from companies
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  Speaker 2: in adjacent industries. These are companies solving the exact same
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  Speaker 2: customer problem, just in a completely different way. Take the
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  Speaker 2: GLP one drugs like ozmpig we Go, the Munjaro yep,
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  Speaker 2: they're not competing on the flavor or protein content, They're
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  Speaker 2: competing on weight loss results. In fact, in the year
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  Speaker 2: to April twenty twenty five alone, over six million jabs
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  Speaker 2: was sold in Australia.
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  Speaker 1: So be man. You can see why Pacific Equity partners
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  Speaker 1: want out before the shakes get completely shaken. Flex Sam,
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  Speaker 1: did you know over the past one hundred and twenty years,
• 6:40
  Speaker 1: eighty one percent of calend years have ended with positive
• 6:42
  Speaker 1: returns on the all ordinaries. But that does not mean
• 6:45
  Speaker 1: when share markets fall, they fall hard and that needs
• 6:48
  Speaker 1: to me Defensive oursets like FIXT Income Securities come in.
• 6:50
  Speaker 1: Make sure to download the Bucks app and check it out.
• 6:52
  Speaker 2: Thanks for listening and we'll see you on Friday.