Latest / What the Flux / GYG's US burrito unravels | Optus = For sale | Oura rings the IPO bell

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GYG's US burrito unravels | Optus = For sale | Oura rings the IPO bell · What the Flux

• 0:05
  Speaker 1: This is what the flux I'm Brett and Justin. It's Monday,
• 0:08
  Speaker 1: the twenty fifth of Bay.
• 0:10
  Speaker 2: We know that BID overtook Tesla as the number one
• 0:12
  Speaker 2: electric vehicle brand by sales back in twenty twenty four,
• 0:16
  Speaker 2: but now BID has been overtaken by its Chinese rival yearly.
• 0:19
  Speaker 2: In fact, really beat BID in sales in the first
• 0:22
  Speaker 2: two months of the year and is now pushing hard
• 0:24
  Speaker 2: into Australia, Europe and the Middle East.
• 0:26
  Speaker 1: Electric figures having a credit comeback moment. As we get
• 0:29
  Speaker 1: towards the end of the month, it's the perfect time
• 0:31
  Speaker 1: to be tracking how I've been spending this month and
• 0:33
  Speaker 1: what is bringing me down. In the flux out, you
• 0:35
  Speaker 1: can track all you're spending and you're saving into one
• 0:37
  Speaker 1: place to see which categories you're spending in, whether it's retail, cafes,
• 0:41
  Speaker 1: and many many more. So, if you want to stay
• 0:42
  Speaker 1: on top of your money and start June on a high,
• 0:44
  Speaker 1: make sure to connect your bankc ount and check out
• 0:46
  Speaker 1: the budgeting tool.
• 0:47
  Speaker 2: Three huge stories today, Josie Boy, Let's do it for
• 0:50
  Speaker 2: our first. Gusmin Egomez has shut its eighth Chicago stores
• 0:53
  Speaker 2: and abandoned its US expansion and its share price rocketed
• 0:57
  Speaker 2: following this big news.
• 0:58
  Speaker 1: Turns out the hottest item on cheero OG's menu was
• 1:00
  Speaker 1: actually capital discipline, So tell me what so.
• 1:03
  Speaker 2: Guzmanigomez or GIG was founded in two thousand and six
• 1:06
  Speaker 2: in Newtown, Sydney by a former Wall Street hedge fund manager.
• 1:09
  Speaker 1: He literally named the food chain after two of his
• 1:11
  Speaker 1: Mexican childhood friends.
• 1:13
  Speaker 2: Since then, it has grown to two hundred and forty
• 1:14
  Speaker 2: two stores across Australia plus locations in Singapore and Japan. Then,
• 1:18
  Speaker 2: in twenty twenty four, Gig listed on the ASEX in
• 1:20
  Speaker 2: the biggest float of the year, with a market cap
• 1:23
  Speaker 2: that briefly hit red billion dollars. Now since then, Jazi boy,
• 1:26
  Speaker 2: It's been one of the most shorted stocks on the ASX,
• 1:28
  Speaker 2: meaning investors were betting the burrito dream might unravel.
• 1:32
  Speaker 1: And why is that?
• 1:33
  Speaker 2: Well, A huge part of Goig's valuation relied on cracking
• 1:35
  Speaker 2: the global market, especially the US.
• 1:37
  Speaker 1: They opened their first US stores in Chicago in twenty twenty,
• 1:40
  Speaker 1: but never really took off.
• 1:41
  Speaker 2: In fact, Gig CEO literally flew to Chicago three months
• 1:44
  Speaker 2: ago to try and save the expansion himself, but.
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  Speaker 1: Last Friday he called a snap meeting with investors to
• 1:48
  Speaker 1: tell them that the US expansion was under performing expectations.
• 1:51
  Speaker 2: And as a result, they're going to shut down the
• 1:53
  Speaker 2: Chicago stores and pull the plug on the US expansion altogether.
• 1:56
  Speaker 1: It's expected to cost GG up to fifty six million
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  Speaker 1: dollars to exit the US. But GG shares jumped eighteen
• 2:03
  Speaker 1: percent on the news. So what's the key learning here?
• 2:05
  Speaker 1: Sometimes the fastest way to grow is to stop force
• 2:07
  Speaker 1: feeding a strategy that just isn't working.
• 2:09
  Speaker 2: Yeap, does it?
• 2:10
  Speaker 1: Wait?
• 2:10
  Speaker 2: GYG shares have been on a steady slide since mid
• 2:14
  Speaker 2: twenty twenty four when its float was and a big
• 2:16
  Speaker 2: chunk of that was the market pricing in the US underperformance.
• 2:20
  Speaker 1: In fact, the man some analysts forecasted that the gg's
• 2:23
  Speaker 1: US business wasn't going to break even until twenty thirty seven.
• 2:26
  Speaker 2: That's right, ten years from now.
• 2:28
  Speaker 1: So it's no wonder. JOG was the fifth most shorted
• 2:30
  Speaker 1: stock on the ASX, but.
• 2:31
  Speaker 2: Clearly, with the share price rising on this news, investors
• 2:34
  Speaker 2: were celebrating some capital discipline from GYG.
• 2:36
  Speaker 1: After talking a very big game for the US.
• 2:39
  Speaker 2: Cutting a loss isn't necessarily retreating now.
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  Speaker 1: For JOG, it just means refocusing on what's actually working,
• 2:45
  Speaker 1: which is its Australian business.
• 2:46
  Speaker 2: And clearly investors were chomping at the burrito for this news.
• 2:50
  Speaker 1: For our second story, Sintel has not so quietly put
• 2:53
  Speaker 1: a forced sale sign on part of Optus, Australia's second
• 2:56
  Speaker 1: biggest telco. Sinktl's looking for someone to split the own bill.
• 3:00
  Speaker 2: Tell me more.
• 3:01
  Speaker 1: Okay, so we all no Optics Australia's second largest telco.
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  Speaker 2: We're talking eight point three to five bill in annual
• 3:06
  Speaker 2: revenue serving over ten million customers in Australia, and that'd
• 3:09
  Speaker 2: be a cross your mobile Internet's your enterprise.
• 3:13
  Speaker 1: Now, be Man. Rewind two thousand and one when Kylie
• 3:15
  Speaker 1: was dropping can't get you out of my head and
• 3:17
  Speaker 1: Cintel acquired the whole of Optis. That's Sintel, the Singapore
• 3:21
  Speaker 1: listed telco giant, which paid seventeen and a half bill
• 3:23
  Speaker 1: for Optus and has owned it outright ever since. At
• 3:26
  Speaker 1: the last few years, it hasn't just been Optus's reception
• 3:28
  Speaker 1: that's been a little bit patchy. Be Mann.
• 3:31
  Speaker 2: They suffered a cyber attack which exposed the data of
• 3:33
  Speaker 2: nearly ten million of its current and former customers.
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  Speaker 1: There were triple zero failures that were linked to deaths.
• 3:38
  Speaker 2: And a one hundred million dollar a triple C fine
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  Speaker 2: for selling mobile plans to vulnerable people who could not
• 3:44
  Speaker 2: afford them.
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  Speaker 1: So now Sintel has told the Singapore Stock Exchange that
• 3:47
  Speaker 1: it's actively looking for a quote meaningful minority partner to
• 3:50
  Speaker 1: buy into optis what type of.
• 3:52
  Speaker 2: Partner they're looking for here?
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  Speaker 1: Seems like they want a local partner, deep pockets, some
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  Speaker 1: political credibility to share the load with.
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  Speaker 2: Them because the load has been heavy over the past
• 4:01
  Speaker 2: few years.
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  Speaker 1: Very true, So what is the key learning here?
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  Speaker 2: A minority stake sale means selling less than fifty percent
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  Speaker 2: of a company to an outside investor.
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  Speaker 1: That new investigates a sluss of the upside, but the
• 4:10
  Speaker 1: majority shareholder keeps driving the.
• 4:12
  Speaker 2: Car does away. For Sintel, it's a way to bring
• 4:15
  Speaker 2: in fresh capital and local credibility without actually handing Optus
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  Speaker 2: over to someone else and.
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  Speaker 1: The man A savvy buyer could look at this Optus
• 4:21
  Speaker 1: opportunity very differently to the consumer brand that's been in
• 4:24
  Speaker 1: the headlines YEAP.
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  Speaker 2: Similar to Telstra, Optus has its own tower assets, fiber
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  Speaker 2: and data infrastructure which could be sold.
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  Speaker 1: In twenty twenty one, it Telstra sald a forty nine
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  Speaker 1: percent steak in its mobile towers for a lazy two
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  Speaker 1: point eight billion dollars.
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  Speaker 2: The appeal for the buyer is stable cash flows from
• 4:38
  Speaker 2: a business with captive customers.
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  Speaker 1: Which is often very appealing for someone like a superfund
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  Speaker 1: or a private equity firm.
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  Speaker 2: The challenge for Sintel is finding a partner who'll accept
• 4:46
  Speaker 2: the minority terms, no.
• 4:47
  Speaker 1: Control rights, no veto rights, but still writing a very
• 4:50
  Speaker 1: large check for.
• 4:51
  Speaker 2: Our third and final story. Or a ring has filed
• 4:54
  Speaker 2: for an IPO as the smart ring maker is eyeing
• 4:57
  Speaker 2: a two bill USD revenue year.
• 5:00
  Speaker 1: Been tracking my sleep, my stress, my recovery, and somehow
• 5:02
  Speaker 1: this news still sparked my heart rate b man, they
• 5:05
  Speaker 1: tell me more so.
• 5:06
  Speaker 2: Aurra is the finish company behind the ORR ring, and
• 5:08
  Speaker 2: it was founded in twenty thirteen.
• 5:10
  Speaker 1: It's the health tracking smart ring that's worn on the finger,
• 5:12
  Speaker 1: quietly judging your lifestyle choices in a real time. Didn't
• 5:15
  Speaker 1: sleep enough, Aura nos two stressed, oh Ara nose, had
• 5:19
  Speaker 1: one glass of wine, and suddenly your recovery score looks
• 5:22
  Speaker 1: like a meme coin chart.
• 5:23
  Speaker 2: Aura definitely knows.
• 5:25
  Speaker 1: It monitors your sleep, your stress, recovery women's health and
• 5:28
  Speaker 1: metabolic health. Basically a tiny wellness coach living on your
• 5:31
  Speaker 1: hand and now has over five million paid members and
• 5:33
  Speaker 1: now b man Aura has confidentially filed IBO paperwork with
• 5:36
  Speaker 1: the SEC in the US, which is the first official
• 5:39
  Speaker 1: step to listing on the Stock Exchange in the US.
• 5:41
  Speaker 2: They were last valued at eleven billion US dollars in
• 5:43
  Speaker 2: October after raising a nine hundred million dollar USD Series
• 5:47
  Speaker 2: E round. But what makes Aura interesting is where they've
• 5:50
  Speaker 2: positioned themselves.
• 5:51
  Speaker 1: Yeah, they're no longer just a wearable tech company. It's
• 5:53
  Speaker 1: a subscription business disguised as jewelry.
• 5:56
  Speaker 2: So what's the key learning here?
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  Speaker 1: Hardware can get you in the door, but subscriptions off
• 6:00
  Speaker 1: and keep the lights on.
• 6:01
  Speaker 2: Aura follows the classic razor and blades business model.
• 6:04
  Speaker 1: The ring gets you in the door, but the monthly
• 6:06
  Speaker 1: membership is where they make the real money.
• 6:08
  Speaker 2: You see, these days, users pay a monthly fee to
• 6:10
  Speaker 2: unlock the insights and analytics that actually make the ring useful.
• 6:13
  Speaker 1: And this matters for the IPO because public market investors
• 6:16
  Speaker 1: love predictable and recurring revenue.
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  Speaker 2: It's a lot more valuable than one off hardware sales.
• 6:21
  Speaker 2: But be man, Aura wasn't always a subscription company until
• 6:24
  Speaker 2: twenty twenty three. You simply bought the ring and got
• 6:25
  Speaker 2: access to everything.
• 6:26
  Speaker 1: But in early twenty twenty three they flipped the model
• 6:28
  Speaker 1: and new members now pay a monthly fee to access
• 6:31
  Speaker 1: all the features on top of the ring cost.
• 6:33
  Speaker 2: And despite the initial backlash, it clearly worked.
• 6:35
  Speaker 1: Yeah, membership's gone from one point twenty five million paid
• 6:37
  Speaker 1: subscribers to over five million in just two years.
• 6:40
  Speaker 2: So clearly Jazzy Boy Aora has found a pretty appealing
• 6:43
  Speaker 2: business model.
• 6:43
  Speaker 1: Flu Sam, If you get to the end of the
• 6:44
  Speaker 1: month and you have no idea what all your money's
• 6:46
  Speaker 1: gone that month, the Flux budgeting tool is going to
• 6:49
  Speaker 1: be your save yet. Make sure to download the Flux
• 6:51
  Speaker 1: app and check out the budgeting tool you want to
• 6:52
  Speaker 1: get on top of your money.
• 6:53
  Speaker 2: Thanks for listening and we'll see you on Wednesday.