This is what the Flux. I'm Brett and I'm justin at it. Monday, the tewond of September, Juzzy boy.
Each in every tax time, the Australian Tax Office warns us of another group that they will be eyeing off. And this year it's people buying assets under businesses and these people enjoy using them for personal use. Now get this, The ACO will use insurance company data to cross check that owners of things like art or yachts or even racehorses are reporting their tax obligations correctly.
Man, I got a true story for you last week. I got to written your notice from my car insurer whose name shalnov be mentioned. Twelve hundred buckaroonis I checked online same insurer. It was seven hundred and sixty dollars. I kid you not. And that's why I'm so excited about our academy this month, the Insurance Crash Course. It runs you through all the different insurances out there, how to decide what you need and how to get a
better deal. To make sure to check it out in the FUX Academy this month.
Three dumb founding stories Today, Juzzy boy, let's do it for our first Adore Beauty has seen its sales jump more than seven percent. But now it's making a slightly unconventional move into this physical world of ours.
The old e commerce is taking it to the physical store and rivaling people like Maya. So tell me more.
Well, Josey boy Adore Beauty is the e commerce retailer that launched in nineteen ninety nine.
And since then it's grown to a product list of over eleven thousand beauty care products with a little touch of Tim.
Tamu and along the journey there was that ASX listing in twenty twenty.
Which, by the bye, their share price is sitting at about one fifth of its listing price during COVID. But now b man Adore Beauty is making its way back because it's announced a seven percent gain in their full year revenue over one hundred and ninety five million bucks and.
Just having a look here, and that profit jumped four hundred and eighty nine percent. I would argue that's huge.
But just on two point two million dollars.
Oh no, So what were the big changes this year for a doll.
They're celebrating they've now got over eight hundred thousand active customers and they pushed a big, big, above the line marketing campaign, but now they're going one better by opening physical stores in Victoria and in Queensland. So what is the key learning here?
Traditionally we've seen physical retailers expand into the online space to reach more customers, but now the reverse is starting to happen.
Be Man e commerce retailers like a door Beauty, They're starting to move into the physical retail world.
And this trend is because of the growing importance of a multi channel approach yep.
This has worked for other e commerce companies which now have showrooms and stores to support their online presence. Think Sleeping Duck or Koala and many others and be Man. It ain't just pure retail players going from online to physical.
Not what about online travel agent Luxury Escapes. They've got a strong online presence.
And recently expand it into having a physical presence in shopping centers too.
So while online shopping offers convenience and reach, physical stores provide an opportunity for customers to interact with products and services in a more tangible way.
Which is particularly valuable in industries like beauty.
For our second story, Apple and Nvidia are in talks to invest in open Ai as part of its latest capital raise, which would value OpenAI at one hundred billion US dollars.
Holy smoker, Rounis, this is getting real and Microsoft surely cannot be happy about this one.
So tell me more, well, jazy boy. OpenAI is a company that was co founded by Sam Oltman and even included Elon Musk on its board in its early day.
And of course it's the company behind the extremely powerful, the sometimes hallucinogetic GPT.
Now johnsy boy, Microsoft was one of the earlier investors in open Ai.
It invested one billion dollars in open Ai in twenty nineteen, and then ten billion US dollars in twenty twenty three.
Overall, it now holds a forty nine percent stake in open Ai.
But now new reports have revealed that in Vidia and Apple also want a slice of the open Ai pie.
YEP, they're considering investing in OpenAI's latest caprets, which would value the biers as mentioned, at one hundred billion US dollars.
Which blah blah blye is a twenty percent uplift on its valuation from just eight months ago.
Kind of makes sense that these two would invest YEP.
In Vidia designs and supplies the AI chips to power open Ai.
And Apple has announced a new chatbot on the iPhone which just so happens to use open Ai.
Seems like a very strategic investment for these two companies.
MM So what is the key learning here?
Strategic investments are critical in the business world because they allow companies to leverage each other's strengths.
Now, for Apple, investing in open ai could help close the AI gap with competitors like Google and Microsoft.
For in video, it's all about securing a major customer for their AI chips, which have.
Already driven a huge surge in in Vidia's sales and profits.
So investing one hundred million dollars into open air is pocket change for these two behemits.
What about for Apple, who has more than sixty one billion US dollars in.
Cash and in Vidia has more than thirty one billion US.
Dollars in cash, especially if the investment is about securing access to cutting edge tech.
And b man, you say the first time a tech company's made a strategic investment like this, I.
Remember where an old Google's parent company, Alphabet, invested nine hundred mili into SpaceX just to get some exposure to satellite based internet.
For our third and final story, setires share price dropped twenty percent last week after it announced its annual learnings it would be twenty percent lower than the previous year.
It's just bad news after bad news for old satire investors. So what's going on here, Jossy boy?
Well. Seti is the Australian online luxury fashion retailer. It started in twenty seventeen and listed on the ASEX in twenty twenty and to say it's had a rap year would be understand of the millennium.
Yeah.
Over the last few months, Seti has been grilled over its business model.
They were also grilled over their supply chain and.
If that wasn't bad enough, it's been under fire for tax avoidance as well.
And now dazy boy Setire has announced in its annual report that earnings for the twelve months to June will be twenty percent lower than the same time last year.
Yep, they reported a ten and a half million dollar profit, whereas last year it was almost sixteen million bucks.
And this new cent centaire is already precarry a share price down twenty percent.
In fact, its share price is now down sixty four percent this year alone, and it wasn't just this time.
Johanna Boyd setires earnings report was published unaudited YEP.
It's auditors are still try and get to the bottom of Seti's revenue recognition.
Interesting, So what is the key eLearning here?
Revenue recognition is an accounting principle that determines when and how a business's revenue has been earned, and.
This has been ongoing and challenging, and it's had controversial for old Satire. Yeah, because setire operates a drop shipping model, so it's a middleman basically between suppliers and customers, but it doesn't hold any of the stock itself, and this has got setires auditors scratching their heads about whether setire is a seller of goods or just an agent.
If setire is just an agent, it will have to change its revenue model and only counted sales margin as revenue, which probably means it'll be reporting much lower revenue overall, and this would have a major impact on how invested c Setire and its financial health.
We've also seen this play out in the beauty sector. When BWX reported revenue recognition issues.
YEP, they came under fire for forcing more products on distributors to inflate their sales figures, and.
BWX is now in voluntary.
Administration, so SETAI is going to have to do some serious reputational rehab if it was indeed found recording revenue incorrectly flex down. There is no sweeter feeling than finding a better deal in your insurance, and we have it all covered in the Flux Insurance Academy this month, what different insurances actually are, what they're needed for, and whether they're worth getting at your current stage in like so make sure you check out the Flux Academy this month.
Thanks for listening, and we'll see you on Wednesday.