This is what the Flux. I'm Brettan. I justin and Wednesday, the fifth of March, Juzy boy, it's a sad day for all the og Skype users. Microsoft has announced it will be shutting down Skype this May after acquiring it nearly fifteen years ago, or as they like to call it, retiring the product. All Skypes colleagues must be chipping in for its very large retirement gift.
Three and a half trillion dollars is in the superannuation industry in Australia and the average Australian has more than one and a half super funds. If you're sitting there thinking that is me, there is only one place to go. That is in the Flux Academy. This month ll we color everything related to Superer, what it is, how to use it and how to choose the super fun most suitable for you.
Make sure to go to the Academy this month to check it all out. Three colorful stories today, Juzzy boy, let's do it for our first. Amazon Australia has seen this revenue jump to seven point seven billion bakarunis in the last financial year, which is up nearly twenty percent compared to last year, the.
Zon arriving at the doorstep of serious dominance. B Man, So tell me more.
Well, juziboy, we know the Zon started in nineteen ninety four as a humble online bookseller, didn't make.
A profit for many years, back when being an unprofitable company was not cool.
Now, Amazon launched in Australia in twenty seventeen, and while they did start pretty quietly, they've spent a lot of money building up that brand. Here.
In fact, be man, Amazon spent around twenty billion dollars investing in Australia.
Seems to be paying off for the zone. Now. It's local revenue jumped nearly twenty percent. It's e commerce business in Australia jump twenty three percent. How about that cloud computing division aws up eighteen percent. But the winner winner Chicken Dinner was Amazon Prime. Yeah, Amazon's Prime loyalty subscription program jump thirty nine percent just for the last year.
And b Man, Amazon law, Amazon's loyalty program is the subscription service that just keeps on delivering literally and financially.
So what is the key learning here?
Loyalty programs do more than just keep your customers loyal. They keep your customers spending.
Get this one, juzy boy. Amazon Prime members sped around one thousand bucks per year on Amazon.
Oh, non Prime members spend between one hundred and five hundred dollars.
And that's the beauty of Amazon's loyalty program.
Yeah, not only does it generate four hundred and eighty million dollars in revenue in Australia alone, but it's a full blown customer spending booster.
They're on top of that, Amazon has a ninety three percent retention rate of Amazon Prime, and that is after the first year.
And they man that's why so many other companies have tried to replicate Amazon Prime's loyalty program. You've got Uber with Uber one, West Farmers with one, Pass, Coals has its Coals Plus.
And Cogan with its cogud one as well. And while it took a while for Amazon to hit its full potential in Australia, you can now see why it's starting to squeeze out local e commerce players.
For our second story, mar Zinc, the snack and sweets giant, is planning to sell twenty five to thirty billion US dollars worth of bonds next week to finance its takeover of Kelenoba.
This deal looking extra chewy. Tell me what's going on here? Okay?
So, mar Zinc is the family owned human food, pet food and snacking behemoth.
Started way back nonineteen eleven in the US of eight and is the owner of some of the mega food brands globally.
We'd be talking Mars Bar obviously, and Milky Way, Mars's arch nemesis.
Not to forget Maltese's Eminem's TwixT Delicious and Extra Chewing Gum.
And let's not forget that Mars is fueling our four legged friends as well with pet foods like Whiskers and Royal Cannon.
But Josie woit. In August last year, Mars announced they would acquire Kelenova for thirty five point nine billion bucks US dollars may add in an all cash deal.
Arue Kellanova's the owner of Pringles and pop Tarts, Nutra Grain, Elsiembars and Josie.
How are pop tarts these days? Are they still good? Delicious?
And this combined company will be one of the top five package food and beverage companies in the whole wide world.
Wait, someone's got to fund these pop tarts and this deal. Yep.
So now Mars is planning to sell up to thirty billion US dollars of bonds in order to pay for Kelenover.
And if this lands, this bond offering could become one of the largest M and A financing deals since twenty thirteen. Interesting, So what is the key learning here? When it comes to funding an acquisition, businesses have three main option.
Option one pay for it with the cash that they have on hand, but when we're talking tens of billions of dollars that becomes pretty rare.
Or Option two raise capital for the acquisition by issuing new shares.
When a company creates new shares and dilutes the current ownership.
And option three would be debt financing like a loan or.
Bondsman Corporate bonds are a very common way for large companies to raise the capital without diluting their ownership, and.
When a company issues bonds, it's essentially taking a loan from investors.
They promised to pay interest known as coupon payments, and eventually return the principal amount at the maturity of the bond.
And jazaweight bonds are often used to finance major acquisition.
Remember when Microsoft sold nearly twenty billion dollars worth of bonds to fund its LinkedIn acquisition.
Or when Anheuser Busch in BEV issued forty six billion US dollars of bonds that was to finance its acquisition of sab Miller.
So Aman Masses already masters the chockey game, and this bond financing will give it a serious play for the snack throne as well. For our third and final story, Tesla is now taking steps to launch a ride sharing service. It could compete directly with Uber Lift and weimo.
Genuine question, is there anything Tesla won't spook at one stage or another? Tell me more, okay?
So, Tesla is the electric car giant that was founded in two thousand and three and launched the world's first mass market electric vehicle, the Model three.
Now Elon Musk, one of the co founders of Tesla, has tested everything under the sun with Tesla, from the bulletproof cyber truck to AI powered Optimus robots.
But now, be man, he's gone one further because Tesla has filed a charter party carrier permit in the US.
Essentially, this is a license that will allow Tesla to own and operate a fleet of ride sharing cars and be Man.
We know that Musk has spoken about an autonomous ride sharing network for about ten years.
Been interestingly Jose boyit the license that they applied for will have human drivers that is so twenty eleven, with a plan to shift to full self driving at some stage in the future. And be Man.
We know that Tesla's castles fell by more than forty four percent in January this year.
And its dock price has dropped around this year, so it's clear why.
It's trying to push into the ride sharing market. So what is the key learning here?
When a company's core business slows down, it often needs to find new ways to grow, grow, grow.
Think about it, by Man. Ride sharing is kind of a natural extension for Tesla.
Well, it already has the cars, and it has brand loyalty even if it is declining. And be Man. By jumping into ride sharing, Tesla can build a new revenue stream, but also begin playing around with its self driving ambition. And be Man.
We've seen other companies like Apple expand into new industries when their primary market's matured Yeap.
Apple moved from iPhones into services like Apple Subscriptions and Apple TV Plus, which now makes up more than twenty one percent of its total revenue, so it's clear that.
Tesla is planning a ride sharing service as a stepping stone towards its autonomous taxi dream Flex Am, do you know what your superfund returned last year on your superbalance? Well, if you don't, there is a lot to know and a lot to consider. We have it all covered in the Flux Academy this month. Make sure to download the Flux app to check it all out.
Thanks for listening, and we'll see you on Friday.