This is what the Flux.
I'm justin and I'm hish Deep and it's Monday, the third of June.
Ay she get this one. Telstra customers who receive their phone mills in the mail will now cop a thirty percent increase in price for the privilege of having paper. It's all part of Telstra's plan to reduce costs in their business and obviously position this as an environmental benefit too.
Of course, Fluxpam, did you know that the majority of Australians would rather speak about death than money. Yep. Money is a pretty awkward topic and that's why we've built this month's academy around having money conversations in your life. Very much needed with your partner, your friends and families. It's guaranteed to help you have better relationships and feel better about your money.
Money back guarantee from Flux. Three delicious stories today.
Let's get into it.
For our first goods. Mini Gomez, the Mexican fast food chain, has announced plans to list on the ASX in June and a multi billion dollar valuation.
Who knew beres could turn into billions? Tell me more?
Okay, so goods, Midigo Mares or gyg As they call themselves Oh Yes. First opened in Sydney in two thousand and six.
The goal was to become a quality Mexican fast food chain and take on the big dogs in fast food like Macas and Hungry Jacks.
And actually, since then it's expanded its network to two hundred and ten restaurants.
And Jazz they aren't just dishing out burrito bowls in Australia.
Oh no, no no, They've also got stores in Singapore, in Japan and the US as well.
After many years of do we don't we list on the Airsex, GYG has announced they will list on the Airsex in June this year.
And as part of this float, GYG will raise two hundred and forty two point five million dollars WOW and will listed evaluation of get this two point two billion dollars Jazz.
Forty two point five million of this raise will be given to existing investors who are looking to sell down.
And the other two hundred meal will be used to fund growth of the business by expanding its network of stores in Australia and then globally as well.
And Jazz Gyg has mentioned there is a voluntary escro arrangement in place for twelve months from listing.
Which means fifty eight percent of their shares will be under this ESCRO.
So tell me what is the key learning here.
A voluntary escro arrangement is when the key stakeholders in the business agree to voluntarily lock up their shares for a certain period post the IPO.
This can range from six months to a year or even longer.
And actually by agreeing to hold on to their shares it sends a strong signal to the market.
Yeah, we believe in the long term potential of the company and are just looking for a quick cash out.
But actually the number of shares in escrow as a percentage of total shares is also important.
Oh yeah, because if only ten percent of shares are in escrow, then ninety percent can still be sold on the market.
The average number of ordinary shares that are subject to ESCRO for Australian companies that are worth less than one hundred million was twenty to forty percent, and.
For Australian companies worth more than one hundred million dollars it ranged from forty to eighty percent in escrow.
That's according to law firm Herbert Smith Freehills.
So Guzmand's fifty eight percent of shares in Escro should help stabilize the share price host.
Ipo without the shares tumbling like a holy built breckydo.
For our second story, the owner of Country Road Group has warned that it expects its earnings to be more than twenty percent lower in comparison to last year.
Jeez, clearly those country Road double bags just I'm selling anymore? So tell me everything well.
Jazz country Road is the fashion retailer that was started back in nineteen seventy four.
And by twenty fourteen, the brand was wholly owned by a South African retailer called Woolworths Holdings Limited.
Not the Australian Woolies that is, no.
No no, and Walwort's Holdings has also got other Aussie brands like Mimco, Trenery, Politics, Witchery under its belt and formerly had David Jones as well.
Now Jazz Wolworth's Holding has just come out with the Country Road Group's twenty twenty four earnings update, and let me tell you it is not looking forward.
Me throw it so.
Wilwors has worn that it expects country Roads earnings to drop by twenty percent compared to FY twenty three.
And actually this is largely due to the slower economic environment. The Country Road is actually facing a double whammy yep.
On the one hand, there's a pressure of high living costs, meaning less demand from customers, and.
On the other hand, there's higher import costs thanks to a weaker Australian dollar.
So tell me what is the key learning here.
When a company relies on imports for its materials or its manufacturing, it's beholden to fluctuations of its local exchanger.
You see jazz. Like many fashion retailers, Country Road imports goods for its operations, and when it.
Does, it often pays for those goods in the supplier country's currency.
If the Australian dollar is stronger against that currency, that means each Aussie dollar can buy more and.
The cost of importing becomes cheaper.
But if the Australian dollar becomes weaker against that currency, like it is right now, the cost of those imported goods goes up.
For example, the Australian dollar has dropped over thirteen percent compared to the US dollar in the last twenty four months, and because.
Of the weaker Aussie dollar, Country roads expenses have jumped significantly more than.
Its revenue, and while many retailers try to offset this foreign exchangers by using hedging strategies, this clearly hasn't been quite successful for the Country Road Grip.
For our third and final story, Salesforce has seen its shares tumble more than twenty percent in its worst day of trading since two thousand and four after week results.
Wow, that is more than fifty billion dollars in a drop in just one day. That's what you call it. Top date at the office. So tell me more.
Okay. So, Salesforce is one of the og software companies that launched back in nineteen ninety nine and is now worth more than two hundred billion US dollars.
Salesforce specialized in the very sexy industry of CRM software.
Oh yeah, CRM stands for Customer Relationship management. In other words, it provides software for large companies.
And helps them drive sales and customer service, marketing, automation and analytics as well.
We're talking mega companies like IBM, PayPal, Sonos, and even Headspace.
And actually, don't forget this sluck. He's also now owned by Salesforce since twenty twenty one.
But late last week, Salesforce warned that its first quarter results would miss its revenue estimates.
And interestingly, this was the first time it's missed its estimates since two thousand and six.
And it warned of a weaker earnings guidance for the upcoming quarter two.
And as a result, Salesforce shares dropped more than twenty percent in it's worst day of trading since two thousand and four.
So tell me, Charles, what is the key learning here?
Achieving revenue guidance is crucial for companies because it reinforces investor confidence.
And Salesforce has had quite a good run of hitting and exceeding their guidances for upcoming quarters.
But actually, interestingly, the forecasts that SMP five hundred companies present to the market are getting less and less accurate.
In fact, between twenty fourteen and twenty eighteen, only sixteen percent of SMP five hundred companies reported results within their guided rates.
Is low, and when a company like Salesforce misses their revenue guidance, especially for the first time in a very long period, it can create uncertainty.
And potentially erode investor trusts.
Wex SAM money is awkward, and that is why we want to help you. In the Flux Academy. This month, we give you all the tips and tricks to speak to your partner, your friends, and your family about money. So make sure to download the Flux app and check out the Academy.
Thanks for listening and we'll see you on Wednesday.