Latest / What the Flux / Adore Beauty's new move | Apple to invest in OpenAI | Cettire's revenue problem

Transcript

Adore Beauty's new move | Apple to invest in OpenAI | Cettire's revenue problem · What the Flux

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  Speaker 1: This is what the Flux. I'm Brett and I'm justin
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  Speaker 1: at it. Monday, the tewond of September, Juzzy boy.
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  Speaker 2: Each in every tax time, the Australian Tax Office warns
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  Speaker 2: us of another group that they will be eyeing off.
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  Speaker 2: And this year it's people buying assets under businesses and
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  Speaker 2: these people enjoy using them for personal use. Now get this,
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  Speaker 2: The ACO will use insurance company data to cross check
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  Speaker 2: that owners of things like art or yachts or even
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  Speaker 2: racehorses are reporting their tax obligations correctly.
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  Speaker 1: Man, I got a true story for you last week.
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  Speaker 1: I got to written your notice from my car insurer
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  Speaker 1: whose name shalnov be mentioned. Twelve hundred buckaroonis I checked
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  Speaker 1: online same insurer. It was seven hundred and sixty dollars.
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  Speaker 1: I kid you not. And that's why I'm so excited
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  Speaker 1: about our academy this month, the Insurance Crash Course. It
• 0:45
  Speaker 1: runs you through all the different insurances out there, how
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  Speaker 1: to decide what you need and how to get a
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  Speaker 1: better deal. To make sure to check it out in
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  Speaker 1: the FUX Academy this month.
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  Speaker 2: Three dumb founding stories Today, Juzzy boy, let's do it
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  Speaker 2: for our first Adore Beauty has seen its sales jump
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  Speaker 2: more than seven percent. But now it's making a slightly
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  Speaker 2: unconventional move into this physical world of ours.
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  Speaker 1: The old e commerce is taking it to the physical
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  Speaker 1: store and rivaling people like Maya. So tell me more.
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  Speaker 2: Well, Josey boy Adore Beauty is the e commerce retailer
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  Speaker 2: that launched in nineteen ninety nine.
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  Speaker 1: And since then it's grown to a product list of
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  Speaker 1: over eleven thousand beauty care products with a little touch
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  Speaker 1: of Tim.
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  Speaker 2: Tamu and along the journey there was that ASX listing
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  Speaker 2: in twenty twenty.
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  Speaker 1: Which, by the bye, their share price is sitting at
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  Speaker 1: about one fifth of its listing price during COVID. But
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  Speaker 1: now b man Adore Beauty is making its way back
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  Speaker 1: because it's announced a seven percent gain in their full
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  Speaker 1: year revenue over one hundred and ninety five million bucks and.
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  Speaker 2: Just having a look here, and that profit jumped four
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  Speaker 2: hundred and eighty nine percent. I would argue that's huge.
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  Speaker 1: But just on two point two million dollars.
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  Speaker 2: Oh no, So what were the big changes this year
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  Speaker 2: for a doll.
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  Speaker 1: They're celebrating they've now got over eight hundred thousand active
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  Speaker 1: customers and they pushed a big, big, above the line
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  Speaker 1: marketing campaign, but now they're going one better by opening
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  Speaker 1: physical stores in Victoria and in Queensland. So what is
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  Speaker 1: the key learning here?
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  Speaker 2: Traditionally we've seen physical retailers expand into the online space
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  Speaker 2: to reach more customers, but now the reverse is starting
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  Speaker 2: to happen.
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  Speaker 1: Be Man e commerce retailers like a door Beauty, They're
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  Speaker 1: starting to move into the physical retail world.
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  Speaker 2: And this trend is because of the growing importance of
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  Speaker 2: a multi channel approach yep.
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  Speaker 1: This has worked for other e commerce companies which now
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  Speaker 1: have showrooms and stores to support their online presence. Think
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  Speaker 1: Sleeping Duck or Koala and many others and be Man.
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  Speaker 1: It ain't just pure retail players going from online to physical.
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  Speaker 2: Not what about online travel agent Luxury Escapes. They've got
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  Speaker 2: a strong online presence.
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  Speaker 1: And recently expand it into having a physical presence in
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  Speaker 1: shopping centers too.
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  Speaker 2: So while online shopping offers convenience and reach, physical stores
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  Speaker 2: provide an opportunity for customers to interact with products and
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  Speaker 2: services in a more tangible way.
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  Speaker 1: Which is particularly valuable in industries like beauty.
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  Speaker 2: For our second story, Apple and Nvidia are in talks
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  Speaker 2: to invest in open Ai as part of its latest
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  Speaker 2: capital raise, which would value OpenAI at one hundred billion
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  Speaker 2: US dollars.
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  Speaker 1: Holy smoker, Rounis, this is getting real and Microsoft surely
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  Speaker 1: cannot be happy about this one.
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  Speaker 2: So tell me more, well, jazy boy. OpenAI is a
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  Speaker 2: company that was co founded by Sam Oltman and even
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  Speaker 2: included Elon Musk on its board in its early day.
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  Speaker 1: And of course it's the company behind the extremely powerful,
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  Speaker 1: the sometimes hallucinogetic GPT.
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  Speaker 2: Now johnsy boy, Microsoft was one of the earlier investors
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  Speaker 2: in open Ai.
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  Speaker 1: It invested one billion dollars in open Ai in twenty nineteen,
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  Speaker 1: and then ten billion US dollars in twenty twenty three.
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  Speaker 2: Overall, it now holds a forty nine percent stake in
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  Speaker 2: open Ai.
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  Speaker 1: But now new reports have revealed that in Vidia and
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  Speaker 1: Apple also want a slice of the open Ai pie.
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  Speaker 2: YEP, they're considering investing in OpenAI's latest caprets, which would
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  Speaker 2: value the biers as mentioned, at one hundred billion US dollars.
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  Speaker 1: Which blah blah blye is a twenty percent uplift on
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  Speaker 1: its valuation from just eight months ago.
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  Speaker 2: Kind of makes sense that these two would invest YEP.
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  Speaker 1: In Vidia designs and supplies the AI chips to power
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  Speaker 1: open Ai.
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  Speaker 2: And Apple has announced a new chatbot on the iPhone
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  Speaker 2: which just so happens to use open Ai.
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  Speaker 1: Seems like a very strategic investment for these two companies.
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  Speaker 2: MM So what is the key learning here?
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  Speaker 1: Strategic investments are critical in the business world because they
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  Speaker 1: allow companies to leverage each other's strengths.
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  Speaker 2: Now, for Apple, investing in open ai could help close
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  Speaker 2: the AI gap with competitors like Google and Microsoft.
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  Speaker 1: For in video, it's all about securing a major customer
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  Speaker 1: for their AI chips, which have.
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  Speaker 2: Already driven a huge surge in in Vidia's sales and profits.
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  Speaker 1: So investing one hundred million dollars into open air is
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  Speaker 1: pocket change for these two behemits.
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  Speaker 2: What about for Apple, who has more than sixty one
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  Speaker 2: billion US dollars in.
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  Speaker 1: Cash and in Vidia has more than thirty one billion US.
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  Speaker 2: Dollars in cash, especially if the investment is about securing
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  Speaker 2: access to cutting edge tech.
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  Speaker 1: And b man, you say the first time a tech
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  Speaker 1: company's made a strategic investment like this, I.
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  Speaker 2: Remember where an old Google's parent company, Alphabet, invested nine
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  Speaker 2: hundred mili into SpaceX just to get some exposure to
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  Speaker 2: satellite based internet.
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  Speaker 1: For our third and final story, setires share price dropped
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  Speaker 1: twenty percent last week after it announced its annual learnings
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  Speaker 1: it would be twenty percent lower than the previous year.
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  Speaker 2: It's just bad news after bad news for old satire investors.
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  Speaker 2: So what's going on here, Jossy boy?
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  Speaker 1: Well. Seti is the Australian online luxury fashion retailer. It
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  Speaker 1: started in twenty seventeen and listed on the ASEX in
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  Speaker 1: twenty twenty and to say it's had a rap year
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  Speaker 1: would be understand of the millennium.
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  Speaker 2: Yeah.
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  Speaker 1: Over the last few months, Seti has been grilled over
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  Speaker 1: its business model.
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  Speaker 2: They were also grilled over their supply chain and.
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  Speaker 1: If that wasn't bad enough, it's been under fire for
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  Speaker 1: tax avoidance as well.
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  Speaker 2: And now dazy boy Setire has announced in its annual
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  Speaker 2: report that earnings for the twelve months to June will
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  Speaker 2: be twenty percent lower than the same time last year.
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  Speaker 1: Yep, they reported a ten and a half million dollar profit,
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  Speaker 1: whereas last year it was almost sixteen million bucks.
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  Speaker 2: And this new cent centaire is already precarry a share
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  Speaker 2: price down twenty percent.
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  Speaker 1: In fact, its share price is now down sixty four
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  Speaker 1: percent this year alone, and it wasn't just this time.
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  Speaker 2: Johanna Boyd setires earnings report was published unaudited YEP.
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  Speaker 1: It's auditors are still try and get to the bottom
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  Speaker 1: of Seti's revenue recognition.
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  Speaker 2: Interesting, So what is the key eLearning here?
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  Speaker 1: Revenue recognition is an accounting principle that determines when and
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  Speaker 1: how a business's revenue has been earned, and.
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  Speaker 2: This has been ongoing and challenging, and it's had controversial
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  Speaker 2: for old Satire. Yeah, because setire operates a drop shipping model,
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  Speaker 2: so it's a middleman basically between suppliers and customers, but
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  Speaker 2: it doesn't hold any of the stock itself, and this
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  Speaker 2: has got setires auditors scratching their heads about whether setire
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  Speaker 2: is a seller of goods or just an agent.
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  Speaker 1: If setire is just an agent, it will have to
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  Speaker 1: change its revenue model and only counted sales margin as revenue,
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  Speaker 1: which probably means it'll be reporting much lower revenue overall,
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  Speaker 1: and this would have a major impact on how invested
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  Speaker 1: c Setire and its financial health.
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  Speaker 2: We've also seen this play out in the beauty sector.
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  Speaker 2: When BWX reported revenue recognition issues.
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  Speaker 1: YEP, they came under fire for forcing more products on
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  Speaker 1: distributors to inflate their sales figures, and.
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  Speaker 2: BWX is now in voluntary.
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  Speaker 1: Administration, so SETAI is going to have to do some
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  Speaker 1: serious reputational rehab if it was indeed found recording revenue
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  Speaker 1: incorrectly flex down. There is no sweeter feeling than finding
• 6:38
  Speaker 1: a better deal in your insurance, and we have it
• 6:40
  Speaker 1: all covered in the Flux Insurance Academy this month, what
• 6:43
  Speaker 1: different insurances actually are, what they're needed for, and whether
• 6:46
  Speaker 1: they're worth getting at your current stage in like so
• 6:48
  Speaker 1: make sure you check out the Flux Academy this month.
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  Speaker 2: Thanks for listening, and we'll see you on Wednesday.