Latest / What the Flux / JB Hi Fi's big, costly warning | GameStop's bold plan to acquire eBay | Gen Z women revive Tinder

Transcript

JB Hi Fi's big, costly warning | GameStop's bold plan to acquire eBay | Gen Z women revive Tinder · 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 Frida.
• 0:08
  Speaker 2: Eighty eighth of May, Juzzy Boy, Virgin Australia has decided
• 0:11
  Speaker 2: the key to beating quantas isn't cheap affairs or extra
• 0:14
  Speaker 2: leg room. Okay, it's a fourteen dollar cheese burger toasty.
• 0:17
  Speaker 2: Get this one. Virgin has overhauled its food venue and
• 0:20
  Speaker 2: they're leaning into meals that have gone viral on TikTok,
• 0:23
  Speaker 2: like the cheese burger Toasty, and they're hoping this could
• 0:25
  Speaker 2: give them a bit of an edge.
• 0:26
  Speaker 1: I'm feeling do buy chocolate next for them? Fox amm
• 0:29
  Speaker 1: As we've rolled it into the first part of May,
• 0:31
  Speaker 1: this is the time when you should be checking your
• 0:33
  Speaker 1: credit score for the month. Has it gone up? Has
• 0:35
  Speaker 1: it gone down depending on what different applications you've made.
• 0:37
  Speaker 1: So if you want to see what the banks say
• 0:38
  Speaker 1: about you, make sure it download the Flux app and
• 0:40
  Speaker 1: check out your credit score for May.
• 0:41
  Speaker 2: Three massive stories today, Juzzy Boy, let's do it for
• 0:44
  Speaker 2: our first JB High Fi sales increase four percent last quarter,
• 0:48
  Speaker 2: but it's warned that it's laptops are facing major price hikes.
• 0:52
  Speaker 1: Rap to every Mother's Day, Jbhiphi, the outchet that was
• 0:55
  Speaker 1: this close to becoming a MacBook. What is going on here?
• 0:57
  Speaker 2: Well, jussy Boy Jbie high Fi is basically a fluorescent
• 1:00
  Speaker 2: lit adult playground.
• 1:02
  Speaker 1: Sales everything from old DVDs to the latest iPhone to
• 1:05
  Speaker 1: random chords you didn't know you needed.
• 1:07
  Speaker 2: Jbhihi now has more than two hundred stores and seven
• 1:09
  Speaker 2: thousand team members across Australia and New Zealand.
• 1:12
  Speaker 1: And then, man, we know there have been a lot
• 1:13
  Speaker 1: of factors lately that have caused an uncertain retail environment.
• 1:16
  Speaker 2: Yeah, supply chain issues, inflation for jbhihi is still doing
• 1:21
  Speaker 2: pretty well.
• 1:21
  Speaker 1: Yeah, sales in its Australian stores which are responsible for
• 1:23
  Speaker 1: around seventy five percent of its earnings whereas four percent
• 1:26
  Speaker 1: in the third.
• 1:26
  Speaker 2: Quarter, and sales in New Zealand arep over twenty three percent.
• 1:29
  Speaker 1: Well, that's good for JB. There's also some not so
• 1:31
  Speaker 1: good news for JB shoppers.
• 1:33
  Speaker 2: Yeah, prices on items like laptops increased by thirty percent
• 1:36
  Speaker 2: in the last few months.
• 1:37
  Speaker 1: And JB hi Fi CEO warns that there are more
• 1:39
  Speaker 1: hikes around the corner.
• 1:41
  Speaker 2: The reason isn't the war in the Middle East.
• 1:43
  Speaker 1: Now, it's because the world is currently building AI data
• 1:45
  Speaker 1: centers like its competitive sport.
• 1:47
  Speaker 2: Ah. These giant AI facilities are hoarding memory chips and
• 1:51
  Speaker 2: computer components.
• 1:52
  Speaker 1: Which means there's less supply left for everyday electronics like laptops.
• 1:56
  Speaker 2: Really interesting, So what's the key learning here?
• 1:58
  Speaker 1: Booms in demand can create second order effects that spill
• 2:01
  Speaker 1: into adjacent markets.
• 2:02
  Speaker 2: And right now AI is doing exactly about to the
• 2:05
  Speaker 2: humble old laptop and its prices. Yeah.
• 2:07
  Speaker 1: Second order effects are basically the unintended flow on consequences
• 2:11
  Speaker 1: of one industry's boom that lands into a completely different one.
• 2:14
  Speaker 2: Think of the electronic vehicle boom when everyone suddenly started
• 2:18
  Speaker 2: buying electric cars. Liftium prices spiked because it was used
• 2:22
  Speaker 2: in EV batteries.
• 2:24
  Speaker 1: Yep, they spiked by around fourteen hundred percent between twenty
• 2:27
  Speaker 1: twenty and twenty twenty two, which made other battery products
• 2:29
  Speaker 1: more expensive too. The same thing's happening here with Jbhi Fi. Yeah,
• 2:32
  Speaker 1: the AI data center boom is eating up memory chips
• 2:35
  Speaker 1: and computer components.
• 2:36
  Speaker 2: And leaving less supply for consumer devices like laptops and investors.
• 2:40
  Speaker 1: I'm not loving it either. JB's shares actually fell six
• 2:43
  Speaker 1: point three percent. Earlier this week on the news for
• 2:45
  Speaker 1: our second story, GameStop share prices falling ten percent after
• 2:48
  Speaker 1: it made an unsolicited fifty five billion US dollar bid
• 2:51
  Speaker 1: to buy eBay, a company that is four times its size.
• 2:54
  Speaker 2: You've got to give game Stop points for confidence here,
• 2:56
  Speaker 2: Jesse boy. Surely what is going on here?
• 2:58
  Speaker 1: Okay? So Gamestops the US game retailer best known for
• 3:01
  Speaker 1: selling secondhand games in the US, but.
• 3:03
  Speaker 2: They also own eb games here in Australia too.
• 3:05
  Speaker 1: Overall, they've got around sixteen hundred stores and a market
• 3:08
  Speaker 1: cap of around twelve billion US dollars.
• 3:10
  Speaker 2: And flux fam If the name game Stop rings a
• 3:12
  Speaker 2: bell is probably because it became the poster child of
• 3:15
  Speaker 2: the twenty twenty one meme stock mania, that.
• 3:17
  Speaker 1: Was when retail investors from Reddit banded together to squeeze
• 3:21
  Speaker 1: hedge funds betting against game Stop.
• 3:23
  Speaker 2: And game Stops stock didn't just rise at absolutely left
• 3:26
  Speaker 2: planet Earth.
• 3:27
  Speaker 1: Yeah, we're talking to jump from five dollars share to
• 3:30
  Speaker 1: over five hundred dollars in just a few weeks.
• 3:32
  Speaker 2: Fast forward to today and GameStop CEO has made an
• 3:35
  Speaker 2: unsolicited fifty five point five billion dollar bid to buy eBay,
• 3:39
  Speaker 2: offering shareholders at twenty percent premium. But Josie boy, there's
• 3:41
  Speaker 2: what tiny issue with the plan. The math is not
• 3:43
  Speaker 2: mathing now.
• 3:44
  Speaker 1: When CNBC asked GameStop CEO where the money was coming from,
• 3:47
  Speaker 1: he said, I don't understand your question.
• 3:49
  Speaker 2: Which is honestly an incredible sentence to hear from someone
• 3:52
  Speaker 2: trying to buy a fifty five billion dollar company.
• 3:54
  Speaker 1: Then he casually added that they just issue more.
• 3:56
  Speaker 2: Shares next minute. GameStop shares fell ten percent on that day,
• 3:59
  Speaker 2: and eBay is increased by five percent.
• 4:01
  Speaker 1: And the man, when your stock price is powered by
• 4:03
  Speaker 1: memes and momentum, almost anything can.
• 4:05
  Speaker 2: Start to be ill possible. So it's okay learning here.
• 4:07
  Speaker 1: The stock market is supposed to price companies rationally, but
• 4:10
  Speaker 1: every now and then it doesn't.
• 4:12
  Speaker 2: And smart or very optimistic CEOs can use that to
• 4:14
  Speaker 2: their advantage.
• 4:15
  Speaker 1: You say, be man. When a meme stock surg is
• 4:17
  Speaker 1: the company shares can become worth way more than the
• 4:19
  Speaker 1: actual business underneath.
• 4:20
  Speaker 2: K Sinpoint game Stop in twenty twenty one.
• 4:23
  Speaker 1: And they took advantage of that by issuing new shares
• 4:25
  Speaker 1: and raising billions of dollars in cash.
• 4:27
  Speaker 2: The result here a struggling retailer ended up sitting on
• 4:30
  Speaker 2: nine billion US dollars in cash.
• 4:32
  Speaker 1: And that cash can actually be used to buy real things.
• 4:34
  Speaker 2: But here's what Gamestop's plan falls apart, because even with
• 4:38
  Speaker 2: all of that cash, they still can't afford ebate.
• 4:40
  Speaker 1: Nine billion dollars in cash. They've got a non binding
• 4:42
  Speaker 1: twenty billion dollar loan and a marktap of eleven billion
• 4:45
  Speaker 1: dollars that is forty bill and the offer is fifty
• 4:48
  Speaker 1: five point five bill.
• 4:49
  Speaker 2: The gap is nearly sixteen bill, and.
• 4:50
  Speaker 1: The CEO's answer on live TV was essentially, we'll just
• 4:53
  Speaker 1: issue more stock.
• 4:54
  Speaker 2: Game stop shares now falling on the back of the announcement,
• 4:57
  Speaker 2: which makes it much harder to raise the money needed
• 4:59
  Speaker 2: to pull this w holding off.
• 5:00
  Speaker 1: For our third and final story, Tinder signups are growing
• 5:03
  Speaker 1: for the first time since twenty twenty four, and it's
• 5:06
  Speaker 1: gen Z women who were swipy right just on.
• 5:08
  Speaker 2: We thought gen Z were ghosting the dating apps for good,
• 5:11
  Speaker 2: Jesse boy tell me more so.
• 5:12
  Speaker 1: Tinder is the og dating app leading the way on
• 5:14
  Speaker 1: swiping your matches since twenty ten.
• 5:16
  Speaker 2: It's owned by Match Group, which is the global dating
• 5:18
  Speaker 2: giant also responsible for Hinge plenty of Fish okay Cupid, and.
• 5:22
  Speaker 1: Over the past few years, Tinder has really struggled to
• 5:24
  Speaker 1: hold on to users.
• 5:25
  Speaker 2: Yeah, monthly users have been dropping off a cliff over
• 5:28
  Speaker 2: the past few years as users say they're burnt out
• 5:30
  Speaker 2: by dating apps.
• 5:31
  Speaker 1: But now tinderspool of New Years's has grown for the
• 5:34
  Speaker 1: first time since twenty twenty four.
• 5:36
  Speaker 2: Yeah, not by much, just one percent, but they'll take it.
• 5:38
  Speaker 1: Keeping in mind that monthly active users fell seven percent
• 5:40
  Speaker 1: in March after dropping ten percent last year, and.
• 5:43
  Speaker 2: Tinder says it's keeping more gen Z women on the app,
• 5:45
  Speaker 2: the most reportedly burnt out of all the datas the reason.
• 5:49
  Speaker 1: Tinder reckons it's because of its new features like astrology
• 5:53
  Speaker 1: mode for star sign.
• 5:53
  Speaker 2: Compatibility or face verification for safety.
• 5:56
  Speaker 1: And shares in match group as a whole have gained
• 5:58
  Speaker 1: eighteen percent this year, So these upgod rades could be
• 6:00
  Speaker 1: looking like a bit of a turnaround for.
• 6:02
  Speaker 2: Tindert So what's the key learning here?
• 6:03
  Speaker 1: When customer behavior changes, brands have to evolve or get
• 6:07
  Speaker 1: left behind.
• 6:07
  Speaker 2: Seventy eight percent of dating app users say they're emotionally, mentally,
• 6:11
  Speaker 2: or physically exhausted by dating apps.
• 6:13
  Speaker 1: That's called swipe fatigue, and it's been Tinder's biggest problem.
• 6:16
  Speaker 2: Tinder's answer to that problem has been repositioning the brand
• 6:19
  Speaker 2: with new features to change how it's perceived in the market.
• 6:21
  Speaker 1: They had a major problem with fake profiles, with bots
• 6:24
  Speaker 1: unsolicited explicit images.
• 6:26
  Speaker 2: So adding face verification and astrology features helps reposition it
• 6:30
  Speaker 2: as more authentic and more safe and potentially more interesting.
• 6:33
  Speaker 1: Even if the upgrade is working, Tinder still faces a
• 6:36
  Speaker 1: massive churn problem yep, and all dating apps have a
• 6:39
  Speaker 1: unique challenge with this. People either find love and delete
• 6:41
  Speaker 1: the app, or don't find love and get frustrated and
• 6:43
  Speaker 1: leave Bucksam. Almost every single Australian has a credit score
• 6:46
  Speaker 1: between zero and twelve hundred, and what your number is
• 6:49
  Speaker 1: depends on a whole load of factors, So if you
• 6:51
  Speaker 1: don't know your number, then make sure you jump on
• 6:52
  Speaker 1: the Flux app and check your credit scoring.
• 6:54
  Speaker 2: Mate, thanks for listening and we'll see you on Monday.