Latest / What the Flux / Virgin Australia's staff gift | Glencore's $30 billion shift | NYT surrenders to AI

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Virgin Australia's staff gift | Glencore's $30 billion shift | NYT surrenders to AI · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Monday, the second
• 0:09
  Speaker 2: of June.
• 0:09
  Speaker 1: Does he wait? We know that Thermo Mix aficionados make
• 0:12
  Speaker 1: claims like Thermomix changed my life, but we didn't know
• 0:15
  Speaker 1: that Thermo Mix was making some wild claims itself.
• 0:18
  Speaker 2: Get this one.
• 0:19
  Speaker 1: Thermomix in Australia falsely claimed that two of its products
• 0:22
  Speaker 1: were endorsed by the NDIS, except they were not. So
• 0:26
  Speaker 1: now the a Triple se has fined Thermo Mix eighteen
• 0:28
  Speaker 1: thousand bucks for making these baseless claims.
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  Speaker 2: Bit call by Thermomix, do not mess with their for
• 0:34
  Speaker 2: hands Flex Mam. If you are stuck with their hex
• 0:36
  Speaker 2: help student get listen up because we cover it all
• 0:39
  Speaker 2: in the Flux app with all the details of how
• 0:41
  Speaker 2: it happens, why it happens, and how might impact you.
• 0:44
  Speaker 2: To make sure to download the Flex app and.
• 0:45
  Speaker 1: Check out the article three Riveting Stories Today Josie Boy,
• 0:48
  Speaker 1: Let's do it for our first. Virgin Australia is offering
• 0:51
  Speaker 1: shares to its staff as it prepares for takeoff on
• 0:55
  Speaker 1: the ASX.
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  Speaker 2: I feel like over the last couple of years they
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  Speaker 2: owe their stuff a bit more than that be man,
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  Speaker 2: but tell any more, Okay?
• 1:00
  Speaker 1: So, Virgin Australia first hit the Australian market in two
• 1:03
  Speaker 1: thousand under the name Virgin Blue.
• 1:05
  Speaker 2: And in twenty eleven it changed its name to Virgin
• 1:07
  Speaker 2: Australia and withstood challenges from Tiger air Lines, Jetstar and
• 1:11
  Speaker 2: the big red Rue Quantus.
• 1:13
  Speaker 1: But Jazzy boy as COVID locked us all down. In
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  Speaker 1: early twenty twenty, Virgin Australia went into administration.
• 1:18
  Speaker 2: And then it was acquired by private equity giant Bain
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  Speaker 2: Capital for seven hundred mel along with five billion dollars
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  Speaker 2: of debt.
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  Speaker 1: And since then it's been pretty much all clear skies,
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  Speaker 1: with earnings of five hundred and nineteen million bucks last financial.
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  Speaker 2: Year and now Virgin Australia's boss has told its eight
• 1:34
  Speaker 2: thousand staff that they could all receive three thousand dollars
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  Speaker 2: worth of Virgin shares before it lists on the Stock Exchange.
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  Speaker 1: Or a takeoff grant of share rights, as Virgin CEO
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  Speaker 1: called it. But of course the man there are some
• 1:46
  Speaker 1: major caveats around this share offfer caveot one. Virgin Australia
• 1:49
  Speaker 1: needs to successfully IPO, which it's expected to do by
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  Speaker 1: the end of June caveat two. These shares would only
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  Speaker 1: convert into ordinary shares ie shares that can be sold
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  Speaker 1: if the employee sticks around for two years post IPO.
• 2:02
  Speaker 2: So what is the key learning here?
• 2:03
  Speaker 1: Employee share schemes programs where companies offer employees equity like
• 2:07
  Speaker 1: shares or options as part of their total remuneration, and
• 2:10
  Speaker 1: it's a way to reward employees and create stronger alignment
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  Speaker 1: between their day to day work and the company's overall performance.
• 2:17
  Speaker 1: That means, if the business performs well and the share
• 2:19
  Speaker 1: price climbs, employees can benefit directly and be.
• 2:22
  Speaker 2: Man These employee share schemes are also a very useful
• 2:25
  Speaker 2: retention tool YEP.
• 2:26
  Speaker 1: As mentioned, the employees need to stick around for twenty
• 2:28
  Speaker 1: four months to have their share rights converted into tradable shares.
• 2:32
  Speaker 2: And this can help reduce staff turnover as well.
• 2:35
  Speaker 1: And Jessie woit, we've seen many technology companies use employee
• 2:38
  Speaker 1: share schemes as part of their overall appeal to employees.
• 2:41
  Speaker 2: None more so than it Lassian, who pays its staff
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  Speaker 2: one point one billion US dollars per year through shares.
• 2:47
  Speaker 1: So clearly virgin Australia is gearing up for its IPO
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  Speaker 1: and AT wants its team to also join the flight
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  Speaker 1: deck as shareholders.
• 2:54
  Speaker 2: For our second story, Glencore, the mining and commodities behemoth,
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  Speaker 2: has shifted over thirty billion dollars of its assets into
• 3:01
  Speaker 2: an Australian subsidiary and it seems to be more than
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  Speaker 2: meets the eye.
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  Speaker 1: Glen Core mining for better valuations. What is going on here?
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  Speaker 2: So, glen Core's a binning company that was founded back
• 3:11
  Speaker 2: in nineteen seventy four in Switzerland.
• 3:14
  Speaker 1: And it's become one of the world's biggest commodity traders
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  Speaker 1: and miners.
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  Speaker 2: We're talking a market cap of thirty three billion pounds.
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  Speaker 1: And while it started in Switzerland, it has operations in
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  Speaker 1: over thirty five countries, including Canada, to Columbia, to South
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  Speaker 1: Africa and of course Australia.
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  Speaker 2: And now be Man. Glencall's transferred thirty billion dollars worth
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  Speaker 2: of its mining assets into an Australian subsidiary.
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  Speaker 1: Interesting and not something you hear companies do every day.
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  Speaker 2: Yeah, we're talking shifting assets like coal and copper and chrome, and.
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  Speaker 1: This means that a big chunk of Glencare's assets, including
• 3:44
  Speaker 1: its coal assets, sit in Australian companies where.
• 3:47
  Speaker 2: Coal assets supposedly achieve higher valuation multiples than in London,
• 3:51
  Speaker 2: which is where they're listed right now. So what's the
• 3:53
  Speaker 2: key learning here?
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  Speaker 1: Not all assets are valued equally and location actually can
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  Speaker 1: play a role.
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  Speaker 2: You see bee Man Glen Coppoli that Australian listed coal
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  Speaker 2: assets actually trade at higher multiples than if they were
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  Speaker 2: listed in London.
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  Speaker 1: So it is doing a bit of a valuation arbitrage.
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  Speaker 2: It's shifting where it's assets sit and also are reported
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  Speaker 2: to take advantage of how investors value it.
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  Speaker 1: In this case, it means that putting coal assets under
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  Speaker 1: an Ossie umbrella might increase their perceived work.
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  Speaker 2: And how does that work well?
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  Speaker 1: Australian investors are very familiar with the role of coal
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  Speaker 1: and the market environment could be more favorable here as well.
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  Speaker 1: For example, Rio Tinto was potentially looking to merge with
• 4:29
  Speaker 1: Glencore back in twenty fourteen and last year as well,
• 4:32
  Speaker 1: in a potential two hundred and sixty billion dollar merger,
• 4:35
  Speaker 1: but the deal fell through. But now with the majority
• 4:37
  Speaker 1: of Glencore's assets legally based in Australia, which Rio also
• 4:41
  Speaker 1: calls home, this mining mega merger could be revisited once again.
• 4:44
  Speaker 2: For our third and final story. The New York Times
• 4:47
  Speaker 2: assigned its first aideal after years of pushing back against
• 4:51
  Speaker 2: AI companies, but it's not with its archer nemesis, Open Ai.
• 4:55
  Speaker 1: What a huge reveal here, Jazzy Boy can't wait to
• 4:57
  Speaker 1: hear where this one goes.
• 4:58
  Speaker 2: Tell me more, okay. New York Times is one of
• 5:00
  Speaker 2: the world's most influential newspapers, with over eleven point six
• 5:04
  Speaker 2: million subscribers.
• 5:05
  Speaker 1: Their subscribers are reading the news, They're taking cooking inspiration
• 5:08
  Speaker 1: from recipes.
• 5:09
  Speaker 2: They're playing wordll and the Mini cross Word.
• 5:11
  Speaker 1: Not to mention keeping up to the latest with sport
• 5:13
  Speaker 1: on the Athletic, the sports arm of the New York Times.
• 5:15
  Speaker 2: How they man. You may remember that The New York
• 5:17
  Speaker 2: Times sued Open Ai and Microsoft in December twenty twenty three.
• 5:21
  Speaker 1: Yep NYT accused them of training their AI models on
• 5:24
  Speaker 1: NYT content without permission.
• 5:26
  Speaker 2: Which is a copyright infringement.
• 5:28
  Speaker 1: While other news outlets have signed commercial partnerships with big
• 5:31
  Speaker 1: dogs of AI, the New York Times has held off.
• 5:33
  Speaker 2: But now The New York Times assigned its first aideal,
• 5:35
  Speaker 2: and apparently it's not with chat JBT.
• 5:38
  Speaker 1: They're bitter foe it is with Amazon. As part of
• 5:40
  Speaker 1: this deal, Amazon will be able to train its large
• 5:43
  Speaker 1: language models on New York Times content, including Alexa.
• 5:46
  Speaker 2: And that means Alexa could soon read out New York
• 5:48
  Speaker 2: Times summaries when you ask about global politics or tonight's
• 5:51
  Speaker 2: dinner plans.
• 5:52
  Speaker 1: And this is a huge step for the New York Times,
• 5:54
  Speaker 1: who has been very resistant to dabbling into.
• 5:57
  Speaker 2: The AI world. Yep, So what is the key learning here?
• 5:59
  Speaker 1: If you're not at the AI table, you're probably on
• 6:02
  Speaker 1: the menu.
• 6:03
  Speaker 2: Yeah. While some media companies are dragging tech giants into court,
• 6:06
  Speaker 2: others are licensing their content and cashing in.
• 6:09
  Speaker 1: Now over the past few years, Josey boy, it's become
• 6:11
  Speaker 1: clear that the media industry is waking up to AI.
• 6:14
  Speaker 2: Yeah, and they've realized that partnerships are the next big
• 6:16
  Speaker 2: monetization lever for content rich businesses.
• 6:19
  Speaker 1: And while sitting it out may feel right on principle
• 6:22
  Speaker 1: for the New York Times, it can also be very costly.
• 6:25
  Speaker 2: Yeah. For example, Newscorps signed a five year, two hundred
• 6:28
  Speaker 2: and fifty million US dollars to deal with open Ai, and
• 6:30
  Speaker 2: others like The Atlantic Conde Nast have also signed deals
• 6:34
  Speaker 2: with open AI. So being absent isn't just missing a trend,
• 6:37
  Speaker 2: it's missing out on some serious future revenue. Fluxdam X
• 6:41
  Speaker 2: helps student debt are getting slashed by twenty percent, so
• 6:44
  Speaker 2: if you've got an X help debt, make sure to
• 6:46
  Speaker 2: check it out in my Glove and in the Flex
• 6:48
  Speaker 2: app where we have a whole download as to what
• 6:50
  Speaker 2: happens and how can impact you. Make sure to download
• 6:52
  Speaker 2: the Flex app and check it out.
• 6:53
  Speaker 1: Thanks for listening and we'll see you on Wednesday.