Latest / What the Flux / Chemist Warehouse's Day 1 on the ASX | Federal government to save Rex airlines | Reddit struggles without Google

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Chemist Warehouse's Day 1 on the ASX | Federal government to save Rex airlines | Reddit struggles without Google · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm Brett and I'm Justin
• 0:07
  Speaker 1: and it's Friday, the fourteenth of February.
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  Speaker 2: Flux Family. If you've got a HEX debt and you're
• 0:12
  Speaker 2: looking to buy a home, listen to this one. The
• 0:14
  Speaker 2: federal government has given a new direction to banks which
• 0:17
  Speaker 2: will allow them to disregard HEX repayments when assessing mortgage applications,
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  Speaker 2: and that means potential homeowners won't be punished for studying
• 0:25
  Speaker 2: at UNI as long as they plan to pay off
• 0:27
  Speaker 2: the debt in the near term. Question Marks over what
• 0:31
  Speaker 2: near term means be There many question marks. Pluxam.
• 0:33
  Speaker 1: If you are looking for a home, then there is
• 0:35
  Speaker 1: one place that will get you to the next level.
• 0:37
  Speaker 1: It's winning fifty bucks on a Friday. In the Flux
• 0:39
  Speaker 1: app will release quick sticks at a random time today
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  Speaker 1: and if you're the first person to answer three business
• 0:44
  Speaker 1: or finance questions correctly, you'll win fifty bucks. To make
• 0:47
  Speaker 1: sure to download the Flux app and turn your notifications
• 0:49
  Speaker 1: on to win it money.
• 0:50
  Speaker 2: Three generous stories today. Juzzy Boy for our first chemist
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  Speaker 2: warehouse officially launched on the ASX yesterday as it's mega
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  Speaker 2: merger with Sigma Healthcare went live.
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  Speaker 1: Now it's time for investiceing. Why pay more for the
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  Speaker 1: share price? So tell me what'll be Man.
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  Speaker 2: Well, Jazzi boy. We all know Chemists ware House as
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  Speaker 2: the pharmacy with ales tighter than compression socks and the
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  Speaker 2: jingle more catchy than hot Potato by the Wiggle. Since
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  Speaker 2: its first store in two thousand, Chemist Warehouse has grown
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  Speaker 2: to more than six hundred stores.
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  Speaker 1: And be Man or Chemists Warehouse announced its plans to
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  Speaker 1: merge with Sigma Healthcare that in December twenty twenty three.
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  Speaker 1: Yesterday was their hard launch.
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  Speaker 2: And chemist Warehouse sprinted from a private company to the
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  Speaker 2: nineteenth largest on the as house.
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  Speaker 1: We're talking to company worth around thirty two billion dollars.
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  Speaker 2: Now for some perspective here, Chemist Warehouse is valued more
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  Speaker 2: than Colds and more than double of Quantus and be Man.
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  Speaker 1: With so few big name companies listing on the ACEX lately,
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  Speaker 1: there has been a heap of buyers that have been
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  Speaker 1: sweeping in YEP, and naturally a lot of sellers getting out,
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  Speaker 1: in particular be Man Chemists Warehouse franchisees who collectively were
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  Speaker 1: holding more than a third of the company pre IPO
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  Speaker 1: and unlike the Chemists ware House founders, these franchisees shares
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  Speaker 1: those were unescrowed.
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  Speaker 2: So they're making a rain as the nasal spray. So
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  Speaker 2: what is the key learning here?
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  Speaker 1: When a company goes public or mergers with another company,
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  Speaker 1: shareholders are often required to hold onto their shares for
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  Speaker 1: a set period of time.
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  Speaker 2: Now. This is called escro and it's designed to prevent
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  Speaker 2: a flood of shares hitting the market all at.
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  Speaker 1: Once, which could crash the share price.
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  Speaker 2: For example, Juzzy Boy Chemist Warehouse co founders own forty
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  Speaker 2: eight point three percent of the merged company, so.
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  Speaker 1: If they were to sell all their shares on day one,
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  Speaker 1: it would be way more supply of shares than demands.
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  Speaker 2: Causing the share price to decline big time, not to
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  Speaker 2: mention the fact that new investors would be less likely
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  Speaker 2: to invest if they knew the founders were out on
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  Speaker 2: day one.
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  Speaker 1: On the other HANDO b Man Chemists ware House franchisees,
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  Speaker 1: who earned about thirty seven and a half percent of
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  Speaker 1: the company aren't under escrow terms.
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  Speaker 2: And with so much interest in Chemists ware House stock,
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  Speaker 2: many franchisees have already jumped at the chance to cash in.
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  Speaker 2: And while the sales of franchise shares has already begun.
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  Speaker 2: We could see even more selling in the coming week.
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  Speaker 2: For our second story, the Federal government says it will
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  Speaker 2: acquire REX Airlines if there isn't a buyer for the
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  Speaker 2: airline by the end of June.
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  Speaker 1: Alba going from Prime Minister to REX CEO. Slush Sugar
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  Speaker 1: Daddy didn't see that on his LinkedIn profile, so John
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  Speaker 1: me Moore.
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  Speaker 2: Well, REX, which is short for Regional Express, has been
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  Speaker 2: flying Australians to the farthest corner of the country since
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  Speaker 2: two thousand and two.
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  Speaker 1: Yeah, it's become the second largest regional airline based on
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  Speaker 1: the number of regional destination.
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  Speaker 2: We're talking Hubert Petty and Cans.
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  Speaker 1: Miljura, even Monkey Mia.
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  Speaker 2: But here's the thing. REX got a little too ambitious
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  Speaker 2: in twenty twenty. It expanded to the big leagues, taking
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  Speaker 2: on the Sydney Melbourne Brisbane triangle and Beeman.
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  Speaker 1: Let's just say it was not a smooth landing.
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  Speaker 2: But by July last year REX had hit turbulence, falling
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  Speaker 2: into administration and scrambling for a buyer. But now be Man,
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  Speaker 2: Rex can't even buy a bid now. As a result,
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  Speaker 2: the Federal government has promised to acquire Rex to ensure
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  Speaker 2: the regional flights remain operational.
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  Speaker 1: And if that happens, it would be the first time
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  Speaker 1: since nineteen ninety five that the Australian government has owned an.
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  Speaker 2: Airline after sailing off Quantas.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: When infrastructure is at risk, governments have no choice but
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  Speaker 2: to step in and sometimes nationalize the service.
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  Speaker 1: Awbman, might I remind you Australia has a history of
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  Speaker 1: going the other way, which is privatizing public assets.
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  Speaker 2: So yes, we'd be talking Quantas, Telstra, the Commonwealth Bank,
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  Speaker 2: which were all once government owned.
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  Speaker 1: But when a key player in a critical market fails,
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  Speaker 1: nationalization becomes an option again.
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  Speaker 2: And juzuboy Rex is a prime candidate for nationalization because
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  Speaker 2: regional airlines connect remote communities around Australia and stimulate regional economy.
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  Speaker 2: And Australia wouldn't be the first country to own or
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  Speaker 2: partially own a national airline.
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  Speaker 1: Singapore Airlines and New Zealand entire Ways just over majority
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  Speaker 1: owned by their respective government.
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  Speaker 2: And Emirates and Ediehead are entirely owned by their government,
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  Speaker 2: so be man.
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  Speaker 1: While the government privatized Quantus nearly thirty years ago it
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  Speaker 1: might step back into the airline industry once again.
• 4:47
  Speaker 2: For our third and final story, reddits Stock has taken
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  Speaker 2: a hit after its user growth missed expectations as it
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  Speaker 2: struggles to compete with Meta and Google. A. You're telling
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  Speaker 2: me that reddit got down voted on Wallster, I am
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  Speaker 2: what is going on here?
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  Speaker 1: Well?
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  Speaker 2: Reddit is the Internet's ultimate rabbit hole, juzzy boy. It's
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  Speaker 2: the place where people post and comment and debate literally everything.
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  Speaker 1: Yeah, they're on nearly three and a half million subreddits.
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  Speaker 1: They cover broad topics like finance and fitness, to some
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  Speaker 1: very specific topics as well.
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  Speaker 2: Like my personal favorite hashtag bread stapled two trees, where
• 5:20
  Speaker 2: people post photos of bread staple two trees.
• 5:23
  Speaker 1: What about hashtag Thomas the dank Engine where people remix
• 5:27
  Speaker 1: and share the Thomas The tank engines are now juzzweit.
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  Speaker 2: Reddit has announced its fourth quarter results where it had
• 5:32
  Speaker 2: just under one hundred and two million daily active users,
• 5:36
  Speaker 2: but analysts.
• 5:36
  Speaker 1: Were expecting nearly one hundred and four million daily activities.
• 5:39
  Speaker 1: So question, what was the reason for this drop in active.
• 5:41
  Speaker 2: User Google's algorithm changes? Tell me more, juzzy boy.
• 5:44
  Speaker 1: Well, Reddit relies heavily on search traffic from Google.
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  Speaker 2: All right, so when Google tweaks the rules, Reddit builds
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  Speaker 2: it hard exactly.
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  Speaker 1: But bit man, it isn't all bad news for Reddit
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  Speaker 1: because even though they had slower use of growth, they
• 5:55
  Speaker 1: saw it. They saw their quarterly revenue jump seventy one percent.
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  Speaker 1: But this is a little for Reddit and friends. That
• 6:01
  Speaker 1: reliance on one single platform can come back to bite you.
• 6:05
  Speaker 1: So what is the key leading here?
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  Speaker 2: Platform dependency risk is when a business relies too heavily
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  Speaker 2: on a single external platform or service provider.
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  Speaker 1: It could be Google, could be Meta, could be Amazon
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  Speaker 1: or other platforms that drive traffic or sales.
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  Speaker 2: And why, oh, why, juzzy boy, your little expert, is
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  Speaker 2: this such a big risk because a single change can
• 6:23
  Speaker 2: create drastic impacts on a company's performance, like what happened
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  Speaker 2: to Reddit. Yeah, on some days, up to fifty percent
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  Speaker 2: of reddits daily visitors came from Google.
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  Speaker 1: While and so a small algorithm change or even a
• 6:34
  Speaker 1: policy update can change the fortunes of a company. Blucklam,
• 6:37
  Speaker 1: make sure to turns silent mode off Florrow, because we
• 6:40
  Speaker 1: are dropping the flux notification for quick sticks. At some
• 6:43
  Speaker 1: time during the day, you be the first person to
• 6:45
  Speaker 1: answer three business or finance questions correctly, you'll win fifty
• 6:48
  Speaker 1: bucks to kick off the weekend. To make sure to
• 6:49
  Speaker 1: download the Flux app, have your notifications turned on and.
• 6:52
  Speaker 2: Silent mode off. Thanks for listening, and we'll see you
• 6:54
  Speaker 2: on Monday.