This is what the Flux.
I'm Brander Justin and at Monday, the twenty second of July, Dozzy boy.
New jobs data was released late last week and the jobs market is still relatively tight. It scurried its way from four percent unemployment to just four point one percent, and that means a slightly higher likelihood that next month's Reserve Bank meeting could mean another cash rate rise. Bookieh Spookie stuff, Fluxlam.
It's the time of the year where everybody is worried about their tax return? How do I do it? When do I submit it? How much money am I gonting at back? That's why we built the Flux tax took it within the Academy this month. Make sure you head to the Flux app and check out the academy.
Three balance worthy stories today, Dozzy boy, let's do it for our first four. Eskew Metals Group, one of Australia's largest companies, has cut seven hundred jobs across its global workforce after its green ambitions haven't quite met investor expectation.
Sounds like all that green hydrogen talk might not have been all it was chalked up to be. So what is the story here?
Well, juzzy Boy. Fortescue is the mining giant that was founded by Andrew Twiggy twig Man Forest back in two thousand and three.
It's since become the fourth largest iron ore producer globally, with a marker cap of a wappen sixty seven billion dollars.
But dose the boy. Interestingly, Fordescue is also at the forefront of developing green hydrogen technology.
Yep, it's set some pretty lotty goals to achieve it net zero by twenty thirty. But now Fortescue has just announced that it'll be acting seven hundred jobs globally and restructuring its business. And not just that being man, it's also scaling back it's green hydrogen initiatives because of high energy prices.
You mean, the same green hydrogen initiatives that it's been raving about since twenty twenty.
Yep, the very same, which is why Fortescue is highlighted a number of times that it has no plans to actually abandon these green hydrogen initiatives.
But there's still a lot of questions in the air about whether Fordescue's investment in this new technology will actually reap any results.
So what is the key learning here.
When a company chooses to innovate with new technology, it needs to balance current shareholder value with long term growth potential.
We know that a company is obligated to a shareholder aka the people who put money into the business.
So if a company wants to mix things up and do something a little bit different, it needs to sell the vision to shareholders successfully and be man.
That's not always easy because investing innovation is inherently experimental and very risky.
There is just no promise that it's going to pay off.
Yeah, there's large upfront costs, there's a tension pulled away from the core business as well.
In fordes Us case, it's green hydrogen initiative has accumulated over two billion dollars in losses. That's so far, and.
While cutting edge technology that tackles climate change sounds exciting, shareholders are only willing to wait so long to see results from new initiatives. For our second story, Microsoft has announced a new AI powered designer app late last week to help newbies with their basic design skill.
This sounds real, can for dup. If you ask me, juzzy boy, tell me everything you know.
Okay, So Microsoft is obviously the behemoth tech company started back in nineteen seventy five and has grown to a three point three trillion US dollar valuation.
We'd be talking about the second largest company in the whole down universe based on market value.
Man. Although Microsoft has made some updates to its offer suite over the years, let's be honest, they haven't been great.
Yep. PowerPoint praises still feel like they're from nineteen ninety eight.
So now Microsoft has announced a new AI powered app. It's called wait for it, Designer every original name. It can give you prompt templates to help kickstart the creative process. Let's be honest, no one knows how to design and give away post from scratch.
But boy, if you're thinking that it sounds awfully similar to the c dog Ie Canvas, you would be right. I was thinking that, actually, except Microsoft has one little leg up on Canvas. It has a partnership with open Ai, so there's a lot of AI in this tool too, And.
All of a sudden, Canvas may just have a big, bad competitor in the design market.
Ooh, you went there. So what is the key learning here?
The hunter has become the hunted.
Over the past eleven years, Canvas identified a major gap in the design market and grew from plucky upstart to establish a leader of design software.
It was hunting down the design software market from Microsoft and Adobe's Photoshop.
But after their rapid growth, they find themselves as the company being hunted by Microsoft.
And be Man. When a tech leader rolls out a new product into an existing offering, it has an enormous strategic advantage distribution.
In fact, Microsoft already has more than one point five billion Office sweet users around the globe.
Compare that to Canvas one hundred and seventy million users and.
Jesi boy this saying the first time we've seen a global tech giant with massive distribution dupe another company's product and make it into a feature.
For example, Garman and Tom Tom they were the leaders in GPS mapping until Google and Apple made it an app in their phones.
What about Adobe? They were the leader in the PDF format until Microsoft created their own PDF viewer in the Office.
Suite, so be Man. Only time will tell if Canva can maintain its design market dominance.
For our third and final story, the maker of ray Ban Sonny's esselaw Laxotica, has acquired the Supreme Fashion brand for one point five billion US dollarydo the.
Old Sunny's and streetwear colob I can kind of see it working. Tell me all a bit of boutground here, Juzzy boys. So, Eslor Luxotica is the merged company of Luxotica from Italy and Essloor from France. Fun fact for you, Eslo Lexotica pretty much owns all of the big eyewear brands around the world.
We'd be talking ray Band Oakley, you're a per sol man, and don't forget Sunglass Heart.
I've seen you in there a few times. That's the Sunny's retailer and they've got over fifty two percent market share in the eyewear industry.
Now, Juzzy boy, it must have come as a bit of a surprise for you when they made a big announcement late last week.
Eslo Luxotica announced it will acquire the streetwear brand Supreme from VF Brands for one and a half billion US dollars. That would be the on trend sweetwear brand that many celebs rock in the papped shots around town. And interestingly, this is Esla Luxotika's first acquisition of an apparel company.
Yeah, it would seem that they want to acquire Supremes platform and connect to Supreme's audience, which is primarily gen Z.
And while the share price of Supreme's owner jumped eight percent, the shares in Eslo Luxotica dropped.
Nearly four mainly because many investors are unsure about the strategic fit of a streetwear brand in a luxury eyewear company.
So what is the key learning here?
A strategic fit is when an acquiring company can benefit from synergies with the acquired company.
So Eslo Lexotica is trying to leverage Supreme brand equity to not only grow the brand further, but also make their eyewear cool again.
And while all of this makes sense in theory, doesn't always work out in brattice.
Remember when will Worth acquired dick Smith for four hundred and thirty million bucks.
And it ended up selling dick Smith to a private equity firm for just twenty million bucks.
So esltt Lexotica will be hoping it can successfully leverage its retail experience in starting to sell Fyfe Culture clothes to gen Z flux Am. The sooner you is to bit your tax returns, the sooner you can potentially get your tax rebite. We've got it all covered in the Flux Academy. This month the FI twenty four tax Toolkits. Make sure to check it out.
Thanks for listening, and we'll see you on Wednesday.