Latest / What the Flux / Firmus goes big with IPO | Marley Spoon’s Ozempic turnaround | Barbie's hefty price tag plus a special guest interview with Andrew Canobi

Transcript

Firmus goes big with IPO | Marley Spoon’s Ozempic turnaround | Barbie's hefty price tag plus a special guest interview with Andrew Canobi · What the Flux

• 0:05
  Speaker 1: This is What The Flux. I'm Brett.
• 0:06
  Speaker 2: And I'm Justin. And it's Wednesday, the 7th of October.
• 0:09
  Speaker 1: Josie Boy, we know that the property market has softened,
• 0:11
  Speaker 1: but it seems like sellers are not willing to listen.
• 0:13
  Speaker 1: Get this, more than a quarter of homes up for
• 0:15
  Speaker 1: sale across Australia have been sitting on the market unsold
• 0:18
  Speaker 1: for six months or more. The reason, a bit of
• 0:21
  Speaker 1: a gap between what buyers are willing to pay and
• 0:23
  Speaker 1: what sellers think they can sell for. Sellers, it's not
• 0:26
  Speaker 1: 2025 anymore.
• 0:27
  Speaker 2: So true. Flotsam, a little personal note from me before
• 0:29
  Speaker 2: we kick off today's pod. A bittersweet reminder, this will
• 0:32
  Speaker 2: be my last week on the podcast. After starting the
• 0:34
  Speaker 2: pod during COVID, sitting on a trestle table in my bedroom,
• 0:37
  Speaker 2: using a doona to soundproof the mic, we've grown to
• 0:39
  Speaker 2: millions of downloads and an enormous community, or the Flotsam
• 0:42
  Speaker 2: as we call it. Now, I'm so proud of what
• 0:43
  Speaker 2: we've achieved and even more excited for what is ahead
• 0:45
  Speaker 2: with the show, which is still in great hands with Brett, Larissa,
• 0:48
  Speaker 2: and the rest of the Flux team.
• 0:50
  Speaker 1: Very sad, Jazzy boy. Very, very excited for you, though.
• 0:52
  Speaker 1: It has been an amazing journey. Hardly missed an app
• 0:54
  Speaker 1: over six years. So FluxFam, yes, it's a big change,
• 0:57
  Speaker 1: but very excited about the future of the pod. Big
• 0:59
  Speaker 1: ideas ahead. So stay tuned. Now, Jazzy Boy, three ripping
• 1:03
  Speaker 1: stories today.
• 1:04
  Speaker 2: Let's do it.
• 1:04
  Speaker 1: For our first. Thermos, the Australian AI factory builder, has
• 1:08
  Speaker 1: put a near $ 44 billion price tag on its IPO,
• 1:11
  Speaker 1: which would make it the second largest IPO in Australian history.
• 1:14
  Speaker 2: I believe that's nearly triple what it was worth just
• 1:16
  Speaker 2: two months ago, Bayman.
• 1:17
  Speaker 3: Yep.
• 1:17
  Speaker 2: What is going on here?
• 1:18
  Speaker 1: So Firmus started about seven years ago as a Bitcoin miner,
• 1:21
  Speaker 1: but when AI started to explode, it made a hard pivot.
• 1:25
  Speaker 3: Yeah.
• 1:25
  Speaker 2: These days it builds and runs AI factories that are
• 1:28
  Speaker 2: supposedly cheaper than almost anyone else. It's basically giant sheds
• 1:31
  Speaker 2: full of Nvidia chips that it rents out to companies
• 1:33
  Speaker 2: like OpenAI and Meta. But B-Man, Firmus is about to
• 1:36
  Speaker 2: make its big ASX debut later this month.
• 1:38
  Speaker 3: Yep.
• 1:39
  Speaker 1: Firmus is planning to raise $ 7 billion as part of
• 1:41
  Speaker 1: its IPO at a company valuation of, take a breath here...
• 1:44
  Speaker 1: $ 43. 7 billion.
• 1:46
  Speaker 2: And back in August this year, it was valued at
• 1:49
  Speaker 2: around $ 15 billion. So it's nearly tripled in two months.
• 1:52
  Speaker 1: So why the massive jump in valuation? Well, they've gone
• 1:54
  Speaker 1: from pitching themselves.
• 1:55
  Speaker 2: They used to pitch themselves as an Aussie AI infrastructure story.
• 1:58
  Speaker 2: But now it's all about the Asian AI infrastructure story.
• 2:01
  Speaker 2: And the bank has kicked off the hunt for buyers
• 2:04
  Speaker 2: on Tuesday this week.
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  Speaker 1: But bankers are offering investors one bit of comfort. A
• 2:08
  Speaker 1: big chunk of insider shares will be locked away in
• 2:10
  Speaker 1: escrow for now.
• 2:11
  Speaker 2: So what is the key learning here?
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  Speaker 1: Getting into an IPO is one thing, but knowing who
• 2:15
  Speaker 1: can cash out on day one is another.
• 2:18
  Speaker 3: Yeah.
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  Speaker 2: Escrow is a lockup that stops certain shareholders selling straight
• 2:21
  Speaker 2: after a listing.
• 2:22
  Speaker 1: And why do these companies have an escrow?
• 2:23
  Speaker 2: Well, it stops insiders from dumping shares on day one
• 2:26
  Speaker 2: and sending the price tumbling.
• 2:28
  Speaker 1: In this case, firm's founders, their families, staff and early
• 2:31
  Speaker 1: funds have about 42% of the company locked up.
• 2:33
  Speaker 2: Yeah, the founders can only sell 10% of their shares
• 2:35
  Speaker 2: after one year and nearly 40% after two years.
• 2:38
  Speaker 1: And interestingly, Jazzy Boy, in most big IPOs, it's the
• 2:41
  Speaker 1: private equity owners who are under escrow.
• 2:43
  Speaker 2: For example, Bain Capital was under escrow in the Virgin IPO.
• 2:46
  Speaker 2: TDM Growth Partners were under escrow in the Guzmini Gomez float.
• 2:49
  Speaker 1: The Firmus float flips a bit of that.
• 2:50
  Speaker 2: Yeah, their big investors sit outside the selling restrictions.
• 2:53
  Speaker 1: But Jazzy Boy, given the supposed demand for this IPO,
• 2:56
  Speaker 1: it seems like many of the new investors are not
• 2:58
  Speaker 1: too concerned.
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  Speaker 3: Mm-hmm.
• 3:00
  Speaker 2: Fluxam, we're excited to have Andrew Kenobi, Director of Australian
• 3:03
  Speaker 2: Fixed Income at Franklin Templeton, join us again on the pod.
• 3:06
  Speaker 2: This is a man who has spent over two decades
• 3:08
  Speaker 2: thinking about bonds so you don't have to. And I'm
• 3:11
  Speaker 2: also excited to have Julie from the Flux team here
• 3:13
  Speaker 2: to hit Andrew with some hard-hitting questions. Get ready, Andrew.
• 3:16
  Speaker 2: Julie is a big bond girl. So today, we're diving
• 3:20
  Speaker 2: into why young investors are sleeping on bonds and the
• 3:23
  Speaker 2: costs of ignoring them in your portfolio. Andrew, welcome back
• 3:25
  Speaker 2: to the show.
• 3:26
  Speaker 1: Thanks, Justin.
• 3:26
  Speaker 3: Thanks, Julie. Great to be here.
• 3:28
  Speaker 2: Yeah. So Andrew, we've spoken a lot about bonds in
• 3:30
  Speaker 2: the last times we interviewed you, but I want to
• 3:32
  Speaker 2: start with a question about the RBA hikes. So as
• 3:35
  Speaker 2: we all know, the RBA just hiked rates at their
• 3:37
  Speaker 2: last meeting in September. How much does a decision like
• 3:39
  Speaker 2: that actually flow through to the bond market?
• 3:41
  Speaker 3: Yeah, that's a great question. I mean, in short, for
• 3:43
  Speaker 3: the decision we had in September, the answer is not
• 3:46
  Speaker 3: very much because the bond market is always trying to
• 3:48
  Speaker 3: anticipate what it thinks will happen. For that particular decision,
• 3:52
  Speaker 3: that was highly expected. by most market participants. So it
• 3:55
  Speaker 3: was very anticipated. It was kind of, in a sense,
• 3:57
  Speaker 3: baked into the cake. I think the bigger impact that
• 4:01
  Speaker 3: the bond market has in terms of debating with itself
• 4:04
  Speaker 3: is more thinking about three, five, 10 years, what is
• 4:07
  Speaker 3: the average level of interest rates going to be? And
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  Speaker 3: so that tends to be something that moves markets around
• 4:12
  Speaker 3: a lot more day-to-day. And that's, of course, going to
• 4:14
  Speaker 3: change day-to-day, week-to-week as it gets more information around expectations
• 4:18
  Speaker 3: for inflation, growth, et cetera.
• 4:20
  Speaker 2: Okay, so it was less about the announcement and more
• 4:22
  Speaker 2: about that the market had already priced that in.
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  Speaker 3: Correct, yeah.
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  Speaker 2: So I was just wondering, what's one myth about bonds
• 4:28
  Speaker 2: you love to bust for young investors?
• 4:31
  Speaker 3: Thanks, Julia.
• 4:32
  Speaker 1: There's lots of myths, actually.
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  Speaker 3: I think one that comes to mind, I think, in
• 4:35
  Speaker 3: recent years, a bond, when you break it down, is basically...
• 4:39
  Speaker 3: You've got a borrower and lender. Often it's between an
• 4:42
  Speaker 3: investor and a government or a corporate, but it's basically
• 4:45
  Speaker 3: a loan. And so what we've seen in some circles
• 4:48
  Speaker 3: and contexts in recent years is anything that looks debt-like
• 4:51
  Speaker 3: can be thrown into the bucket or category of fixed
• 4:55
  Speaker 3: income or fixed interest.
• 4:56
  Speaker 1: And it's very, very broad.
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  Speaker 3: The problem with it is If you look at equities,
• 5:00
  Speaker 3: an equity is an equity. If you look at bonds,
• 5:01
  Speaker 3: you could be buying a government bond. You could be
• 5:04
  Speaker 3: buying a highly risky high yield bond to a very,
• 5:08
  Speaker 3: very risky corporate. And more recently, as we've seen, you
• 5:11
  Speaker 3: could be buying private credit, which is a different type
• 5:14
  Speaker 3: of exposure altogether. So I think part of the challenge
• 5:17
  Speaker 3: is really understanding what's beneath the hood, so to speak,
• 5:21
  Speaker 3: when you're thinking about debt or fixed income.
• 5:23
  Speaker 2: Andrew, I can imagine you look at a lot of
• 5:25
  Speaker 2: graphs in your job. What would surprise people the most
• 5:28
  Speaker 2: if they compared stocks and bonds side by side on
• 5:30
  Speaker 2: a graph? Yeah, that's an interesting one.
• 5:32
  Speaker 3: I think when I think about a graph of stocks
• 5:35
  Speaker 3: and bonds, the thing I would want to plot is
• 5:37
  Speaker 3: the yield of the two. You know, in the Australian
• 5:40
  Speaker 3: stock market in particular, people often invest in it for
• 5:43
  Speaker 3: the income or the dividends. And I think a good
• 5:45
  Speaker 3: comparison is comparing, say, the dividend yield of the ASX
• 5:49
  Speaker 3: 200 with the average yield to maturity of the investment
• 5:53
  Speaker 3: grade Australian Corporate Bond Index. Because you're really comparing the
• 5:56
  Speaker 3: same sorts of companies, by which I mean major banks, miners, telecoms,
• 6:00
  Speaker 3: et cetera, in terms of what they return as an
• 6:02
  Speaker 3: equity investor income, what they return as a bond investor.
• 6:05
  Speaker 3: When I look at that chart, you know, the average
• 6:08
  Speaker 3: dividend yield is sort of three, three and a half
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  Speaker 3: to maybe 4%. Mm-hmm.
• 6:12
  Speaker 1: The average yield to maturity.
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  Speaker 3: For the bond equivalent is close to six. And the
• 6:17
  Speaker 3: great thing about that is the bonds are less risky.
• 6:19
  Speaker 3: You have to pay your coupon. If you're a CFO
• 6:21
  Speaker 3: and you don't pay your coupon, you're going to default.
• 6:23
  Speaker 3: If you're a CFO and you don't pay your dividend,
• 6:25
  Speaker 3: it's kind of annoying, but there are no legal consequences.
• 6:28
  Speaker 2: That's interesting. Super interesting. And so then I guess you're
• 6:31
  Speaker 2: really relying on capital growth if you want to get
• 6:33
  Speaker 2: a better overall yield from the equities as opposed to
• 6:37
  Speaker 2: the bonds.
• 6:38
  Speaker 1: Totally.
• 6:38
  Speaker 3: So if you look at the Aussie share market, like
• 6:40
  Speaker 3: the large cap share market this century, go back to 2000,
• 6:43
  Speaker 3: you know, the average total return per annum is in
• 6:46
  Speaker 3: that sort of 8% to 9% area.
• 6:48
  Speaker 1: So it's pretty good.
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  Speaker 3: But around 50% of that total return is the dividend stream. So,
• 6:53
  Speaker 3: you know, our share market has a very well-known reputation
• 6:56
  Speaker 3: as a high income market because of the dividend paying
• 6:59
  Speaker 3: nature of the companies in this economy. So, you know,
• 7:01
  Speaker 3: only about 50% has come from the real equity price
• 7:05
  Speaker 3: growth attribute. And as I mentioned earlier, like the average
• 7:08
  Speaker 3: dividend yield at the moment on that share market is
• 7:10
  Speaker 3: about three and a half. So, you know, I don't
• 7:12
  Speaker 3: have a crystal ball. I don't know what the outlook
• 7:13
  Speaker 3: is for stocks, but if I double that, I get seven. Heck,
• 7:16
  Speaker 3: at the moment, I'm getting six just for showing up.
• 7:19
  Speaker 3: With high quality investment grades. So all of a sudden
• 7:22
  Speaker 3: I'm getting paid a lot for much less risk. And
• 7:24
  Speaker 3: I think the equation is really interesting.
• 7:26
  Speaker 2: Andrew, thanks again for joining us on the pod and
• 7:28
  Speaker 2: look forward to chatting with you again.
• 7:29
  Speaker 3: Thanks guys. Yeah, likewise.
• 7:31
  Speaker 1: Look forward to it.
• 7:32
  Speaker 2: For our second story, Marley Spoon, the meal kit company,
• 7:35
  Speaker 2: has seen a major turnaround in sales after selling new
• 7:38
  Speaker 2: meal kits for people on Ozempic.
• 7:40
  Speaker 1: Marley Spoon is serving up smaller portions and bigger profits.
• 7:43
  Speaker 1: Tell me more.
• 7:43
  Speaker 2: So Marley Spoon started in Berlin, Germany in 2014, posting
• 7:47
  Speaker 2: boxes of recipes and ingredients to your door. And Australia's
• 7:50
  Speaker 2: become one of its biggest markets. Hey man, I reckon
• 7:52
  Speaker 2: almost every Aussie's been a Marley Spoon customer at some point.
• 7:55
  Speaker 3: Yep.
• 7:55
  Speaker 1: First it's the 50% off.
• 7:56
  Speaker 3: Yep.
• 7:56
  Speaker 1: Then it's the 60% off.
• 7:57
  Speaker 3: Yep.
• 7:58
  Speaker 1: Then they practically pay you to eat their dinner.
• 8:00
  Speaker 2: Then a few weeks later, the full price kicks in.
• 8:02
  Speaker 2: You cancel faster than you can say free range eggs.
• 8:04
  Speaker 1: And lately, a lot of people have been sticking with
• 8:06
  Speaker 1: the cancel button.
• 8:07
  Speaker 3: Yep.
• 8:07
  Speaker 2: Local sales fell about 15% last financial year to just
• 8:11
  Speaker 2: under 150 mil.
• 8:11
  Speaker 1: So in May, Marley Spoon decided on a little pivot.
• 8:14
  Speaker 1: They built a range made for people on GLP-1 weight
• 8:17
  Speaker 1: loss drugs.
• 8:18
  Speaker 2: And those meals have tripled in sales, growing 110% every
• 8:20
  Speaker 2: single month.
• 8:22
  Speaker 1: And while they currently make up 6.5% of local sales,
• 8:25
  Speaker 1: the CEO thinks that could eventually reach 20% of every
• 8:28
  Speaker 1: meal they sell. Wow.
• 8:29
  Speaker 2: So what is the key learning here?
• 8:30
  Speaker 1: The biggest disruptor in the snack aisle isn't a new flavor,
• 8:33
  Speaker 1: it's a weekly jab and soon-to-be pill.
• 8:36
  Speaker 3: Yeah.
• 8:36
  Speaker 2: You see, B-Man, GLP-1 drugs like Ozempic work by switching
• 8:40
  Speaker 2: off your appetite, meaning people generally want less food.
• 8:43
  Speaker 1: But the catch is that these GLP-ers... Don't just lose fat.
• 8:46
  Speaker 2: Nah, up to half the weight loss can be lean mass,
• 8:48
  Speaker 2: including muscle.
• 8:49
  Speaker 1: And because they slow down your digestion, things can get
• 8:51
  Speaker 1: a little slow moving too.
• 8:53
  Speaker 2: So the new GLP-1 diet is basically more protein for
• 8:56
  Speaker 2: your muscles, more fiber for your plumbing. And so snack
• 9:00
  Speaker 2: companies are pivoting hard. Nestle launched a whole brand for
• 9:02
  Speaker 2: GLP-1 users.
• 9:03
  Speaker 1: Healthy Choice stuck GLP-1 friendly labels on its frozen meals.
• 9:06
  Speaker 1: And now everything from pasta to chips and yogurts are
• 9:09
  Speaker 1: adding more protein to appeal to the about half a
• 9:12
  Speaker 1: million Australians now taking GLP-1 medicines regularly.
• 9:15
  Speaker 2: So be a man for Marley Spoon, weight loss might
• 9:17
  Speaker 2: just be the recipe for their growth.
• 9:19
  Speaker 1: For our third and final story, Mattel, the toy maker
• 9:22
  Speaker 1: of Barbie and Hot Wheels, has received takeover interest from
• 9:25
  Speaker 1: a buyer which could value the business at $ 6 billion.
• 9:27
  Speaker 2: Barbie might be packing up for a new dream house, B-Man,
• 9:30
  Speaker 2: so tell me what.
• 9:30
  Speaker 1: So Mattel is the toy giant behind Barbie and Hot
• 9:32
  Speaker 1: Wheels and American Girl dolls.
• 9:34
  Speaker 2: And it's been filling toy boxes since 1945.
• 9:37
  Speaker 1: But Jazzy Boy, life in plastic hasn't been so fantastic
• 9:40
  Speaker 1: for Mattel lately. It shares are down more than 30%
• 9:42
  Speaker 1: this year alone. And this week its CEO packed his
• 9:45
  Speaker 1: bags to go run Paramount too. That's really got to hurt.
• 9:47
  Speaker 2: Yeah, and now there's reportedly someone knocking on Mattel's pink
• 9:51
  Speaker 2: front door.
• 9:51
  Speaker 1: Yep, we're talking about Authentic Brands Group, the brand licensing giant.
• 9:55
  Speaker 2: They also own Reebok and Champion and our very own
• 9:57
  Speaker 2: Quicksilver and Billabong brands too.
• 9:59
  Speaker 1: And they have.
• 10:05
  Speaker 2: current share price.
• 10:06
  Speaker 1: Mattel shares jumped 19% following this news, their biggest one
• 10:10
  Speaker 1: day gain in seven and a half years.
• 10:11
  Speaker 2: But hey man, it does seem like investors like the
• 10:13
  Speaker 2: idea of a new owner for the Barbie Dreamhouse at
• 10:16
  Speaker 2: a premium price.
• 10:17
  Speaker 1: So what's the key learning here?
• 10:18
  Speaker 2: In the takeover world, nobody hands over the keys at
• 10:20
  Speaker 2: the sticker price.
• 10:21
  Speaker 1: A takeover premium is the extra a buyer pays above
• 10:25
  Speaker 1: the current share price. To convince shareholders to actually hand
• 10:27
  Speaker 1: over their shares. So why not just pay what the
• 10:29
  Speaker 1: market says it is worth?
• 10:31
  Speaker 2: Because, B-Man, if they did that, why would a shareholder
• 10:33
  Speaker 2: sell for the same price they could get tomorrow on
• 10:35
  Speaker 2: the market?
• 10:35
  Speaker 1: And these premiums are not small.
• 10:37
  Speaker 2: Nah. Aussie takeovers in 2025 paid an average premium of
• 10:40
  Speaker 2: around $ 50.
• 10:41
  Speaker 1: And over 60% when private equity was buying.
• 10:43
  Speaker 2: So, B-Man, a $ 20 per share offer is almost 60%
• 10:46
  Speaker 2: above when Mattel closed before the news broke, which is
• 10:49
  Speaker 2: right in the zone.
• 10:50
  Speaker 1: But here's the thing. 70% to 90% of acquisitions are
• 10:53
  Speaker 1: considered failures when it comes to creating value. That's according
• 10:56
  Speaker 1: to Harvard Business Review.
• 10:57
  Speaker 2: So, B-Man, if Authentic does pay up, Barbie needs to
• 11:00
  Speaker 2: earn every cent of that premium.
• 11:01
  Speaker 3: Mm-hmm.
• 11:02
  Speaker 2: Fluxam, did you know one in four Australians have no
• 11:05
  Speaker 2: idea what super fund they even with? If that's you,
• 11:07
  Speaker 2: the Flux Academy this month is where you've got to start.
• 11:09
  Speaker 2: We break down how to find where your super is,
• 11:11
  Speaker 2: how to compare it against other super funds and teach
• 11:13
  Speaker 2: you how to make moves that future you will be
• 11:16
  Speaker 2: thanking current you for. So make sure to download the
• 11:18
  Speaker 2: Flux app to check out the Super Academy this month
• 11:20
  Speaker 2: and win some big prizes.
• 11:21
  Speaker 1: Thanks for listening and we'll see you on Friday.