Latest / What the Flux / Qantas cuts routes | Judo Bank falls 40% after bad debts rise | Meta gets into gambling

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Qantas cuts routes | Judo Bank falls 40% after bad debts rise | Meta gets into gambling · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm justin and I'm Larissa, and it's Friday, the twenty
• 0:09
  Speaker 2: sixth of June.
• 0:10
  Speaker 1: Take it away.
• 0:11
  Speaker 2: What goes up must come down jails. Space ITX knows
• 0:14
  Speaker 2: this bist with its rockets, but it's happening with its
• 0:17
  Speaker 2: sheer price.
• 0:18
  Speaker 1: Two.
• 0:18
  Speaker 2: Okay, we know that Space is ipo'd last week and
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  Speaker 2: saw its sheer price spike over the listing, But over
• 0:24
  Speaker 2: the past five days, its sheer price has fallen by
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  Speaker 2: more than twenty five percent, now sitting below its IPO price.
• 0:30
  Speaker 2: Watch the Space.
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  Speaker 1: No pun intended there, Flux Ta it is Friday. That
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  Speaker 1: means we are dropping quick sticks in the Flux app.
• 0:37
  Speaker 1: You can win fifty dollars if you answer three business
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  Speaker 1: or finance question correctly and you're the first person to
• 0:42
  Speaker 1: do it. So if you want to in fifty bucks
• 0:43
  Speaker 1: to kick off your weekend, and make sure to download
• 0:44
  Speaker 1: the Flux app, turn your notifications on and be the
• 0:46
  Speaker 1: first to answer all the questions there are. So we
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  Speaker 1: have three spaceworthy stories today too, let's do it for
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  Speaker 1: our first. Quantus and its smaller sibling, Jetstar are cutting
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  Speaker 1: flight routes across Australia and Australians in regional centers are
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  Speaker 1: about to feel it.
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  Speaker 2: Bookn your flight to Alice Springs soon. Yeah, probably not
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  Speaker 2: going to happen on Quantus, tell me more.
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  Speaker 1: Okay? So Quantus is Australia's national carrier and one of
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  Speaker 1: the world's oldest airlines, flying since nineteen twenty And.
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  Speaker 2: Does Quantus originally stood for Queensland and Northern Territory Aerial Services.
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  Speaker 1: Which is a little bit ironic given its latest announcement.
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  Speaker 1: Go on, Well, Quantus and its budget siblings Jetstar have
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  Speaker 1: announced a cut of a number of their roots to
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  Speaker 1: Darwin Alice Springs.
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  Speaker 2: But then also cutting other routes from Queensland to New
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  Speaker 2: Zealand two.
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  Speaker 1: And why the cuts Well, Quantus.
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  Speaker 2: Says there has been a fall of demand for these
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  Speaker 2: routes and rising.
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  Speaker 1: Costs, increasing passenger movement taxes from the federal government and.
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  Speaker 2: Also increases in security costs and Larisa.
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  Speaker 1: This is all an example of what happens when the
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  Speaker 1: economics of a route tip over into being unviable.
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  Speaker 2: So what's the key learning?
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  Speaker 1: For many airlines, a flight route comes down to a
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  Speaker 1: business case. When that fails, the route often disappears.
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  Speaker 2: Every route in airline flies has to cover its costs.
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  Speaker 2: There's fuel costs, there's crew wages, there's landing fees, there's
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  Speaker 2: maintenance and our government charges as well.
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  Speaker 1: Juzz.
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  Speaker 2: The industry rule of thumb is that airlines need to
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  Speaker 2: fill roughly seventy percent of seats just to break even.
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  Speaker 1: And when they can't cover what it costs to operate
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  Speaker 1: the flight and they're not selling enough seats, the route
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  Speaker 1: often gets cut.
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  Speaker 2: Yeah, and according to Airlines for Australia, the increased costs
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  Speaker 2: of flying are now changing the economics of routes across
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  Speaker 2: the industry.
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  Speaker 1: And Larissa Virgin has also been cutting roots recently.
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  Speaker 2: So it seems like the direct flight is becoming more
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  Speaker 2: of a privilege than an expectation.
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  Speaker 1: For our second story, Judo Bank share price has collapsed
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  Speaker 1: more than forty percent in a single day after they
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  Speaker 1: had three problem business loans blow up all simultaneously.
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  Speaker 2: Studo banks feeling the pain this week, Tell me more, okay. So.
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  Speaker 1: Juda Bank was founded in twenty sixteen by ex Nair
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  Speaker 1: bankers who thought that Big four were ignoring small business.
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  Speaker 2: And after five years of growth, it floated on the
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  Speaker 2: A six and twenty twenty one at a market cap
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  Speaker 2: of over two point five billion dollars, and there is.
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  Speaker 1: Despite having a banking license. Judo is one of the
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  Speaker 1: only banks in Australia that only does business lending.
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  Speaker 2: And the got a fifteen billion dollar loan book.
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  Speaker 1: But Larusa yesterday, judo share price fell almost forty percent.
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  Speaker 1: And why was that well they warned of a shock
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  Speaker 1: profit downgrade. And why was that well they said three
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  Speaker 1: business loans had gone bad almost simultaneously.
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  Speaker 2: We're talking blind manufacturer, a financial planning firm, and a
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  Speaker 2: construction services company, all different states, totally unrelated.
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  Speaker 1: And so Judo had to give confidence to investors. This
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  Speaker 1: was not systemic, just three separate, very specific cases of
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  Speaker 1: bad lash.
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  Speaker 2: Analysts were not buying a Shears tanked forty percent in
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  Speaker 2: a single session.
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  Speaker 1: But the big question is whether Australia's small and medium
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  Speaker 1: sized businesses are in more trouble than anyone's admitting.
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  Speaker 2: So what's the key learning here?
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  Speaker 1: When an SME bank starts bleeding, investors start to check
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  Speaker 1: the pulse of the bigger banks and the broader economy.
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  Speaker 2: Here's the thing. Judo only lends to small and medium businesses,
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  Speaker 2: so that makes it uniquely exposed to SME's stress, but.
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  Speaker 1: It also makes it uniquely useful as an early warning system.
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  Speaker 2: Because SME is inherently riskier than the home loans.
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  Speaker 1: According to the IBA, small businesses account for around ninety
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  Speaker 1: eight percent of all businesses in Australia.
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  Speaker 2: And that is Judo's market.
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  Speaker 1: But the businesses in this market are very exposed to
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  Speaker 1: rate rises and increasing fuel costs and declines in consumer confidence, all.
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  Speaker 2: Of which has happened in the past three months.
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  Speaker 1: And off the back of the Judo news. NAB, Australia's
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  Speaker 1: biggest business lender, saw a share price drop nearly four
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  Speaker 1: percent in anticipation of their own bad news.
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  Speaker 2: While Combank and Wispac copped a one to two percent
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  Speaker 2: fall in their share price too.
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  Speaker 1: So time will tell whether all the banks feel as
• 4:32
  Speaker 1: much pain as Judo's feeling. Right now.
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  Speaker 2: For our third and final story, Mita is bitting on
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  Speaker 2: prediction markets after secretly launching a new standalone app called Arena.
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  Speaker 1: The Zack spotted the one thing on the Internet growing
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  Speaker 1: faster than doom scrolling and he wanted a piece of it.
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  Speaker 1: Tell me more well.
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  Speaker 2: A bit of background. Jazz, Polymarket and Calshi are prediction
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  Speaker 2: market platforms were users bit on real world.
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  Speaker 1: Outcomes, anything from elections to sports to even how long
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  Speaker 1: the US anthem runs during an NFL game.
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  Speaker 2: Yeah, and these platforms have your own like crazy over
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  Speaker 2: the past few years.
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  Speaker 1: Yeah, in twenty twenty five, these two platforms facilitated fifty
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  Speaker 1: billion US dollars in trades, but this.
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  Speaker 2: Year it's already blown past one hundred and thirty billion
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  Speaker 2: usd in trades.
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  Speaker 1: So now the ZAK has created a small team to
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  Speaker 1: build a rival app to Polymarket and Calshi, codenamed Arena.
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  Speaker 2: And it would run completely separate from Facebook, Instagram and
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  Speaker 2: what day.
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  Speaker 1: For now, there won't be any real money traded on
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  Speaker 1: the Arena app. It'd run on a video game style
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  Speaker 1: points system instead.
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  Speaker 2: But Mittle would lean on its more than three point
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  Speaker 2: five billion daily active users to funnel people into the app, which.
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  Speaker 1: Is basically a cheat come for distribution.
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  Speaker 2: Interesting that they've created Arena as a totally.
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  Speaker 1: New app, So what's the key learning here?
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  Speaker 2: Building a new app when you already have billions of
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  Speaker 2: users sounds like an automatic win, but history says otherwise.
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  Speaker 1: Yeah. Metas tried the standalone app playbook before, and its
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  Speaker 1: track record is mixed.
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  Speaker 2: They launched Threads to rival Twitter and that kind of work.
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  Speaker 1: Yeah, Threads as a standalone app hit over one hundred
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  Speaker 1: million uses after just five days of launching.
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  Speaker 2: And over two hundred and seventy five million monthly active
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  Speaker 2: users in the first year, but it.
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  Speaker 1: Still hasn't quite taken over x formerly known as Twitter.
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  Speaker 2: But before that, Mita had tried to launch Lasso as
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  Speaker 2: a standalone app, which was a TikTok loan.
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  Speaker 1: And it failed. Then there was Forecast, which was actually
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  Speaker 1: a prediction market it built a few years ago that
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  Speaker 1: also failed.
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  Speaker 2: But while Mita have enormous distribution, they're asking for three
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  Speaker 2: point five billion users to build a new habit in
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  Speaker 2: a brand new app.
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  Speaker 1: And getting those users to actually build a new behavior
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  Speaker 1: around it is a completely different thing.
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  Speaker 2: So with the play money and the arena app, right now,
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  Speaker 2: it's hard to know whether this will actually compete with
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  Speaker 2: Calshi and Polymarket.
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  Speaker 1: Or whether it will face the same fate as Lasso
• 6:36
  Speaker 1: and Forecast. In the metasymetry of apps. Fux Am it
• 6:39
  Speaker 1: is Friday. That means it is your opportunity to win
• 6:42
  Speaker 1: fifty bucks in the Flux app with our weekly game
• 6:44
  Speaker 1: Quick Sticks. All you need to do is download the
• 6:45
  Speaker 1: Flex app, turn your notifications on, and be the first
• 6:48
  Speaker 1: person to answer three business or finance questions correctly. And
• 6:50
  Speaker 1: the fifty bucks is yours.
• 6:52
  Speaker 2: Thanks for listening, and we'll see you on Monday.