This is the Blacks.
I'm Brettan, I'm justin and it's Friday, the ninth of August. Juzzy Boy.
Online betting agencies are shaking in their betting booties. The government is exploring new crackdowns on gambling ads on TV, before, during, and after live sport, and experts reckon. If these changes go through, it could cost the gambling industry six point four billion dollars.
Not a small amount of money, by man, I'm speaking of money. If you want fifty bucks in your front pocket this weekend, there is only one way to do it. It's through our weekly quiz at quick Stix that we three questions. That we three business or money questions, and if you're the first to answer correctly, you'll win the fifty bucks. So all you've got to do is download the Flux app and turn your notifications on.
Three revolutionary stories today. Juzzy boy, let's do it for our first. Nine Entertainment is expected to wrap up its two year share buyback after a whack in profits and business performance.
Not ideal to be buying back shares when your revenue is on the way down, So tell me all, okay.
Nine Entertainment is the Aussie media company with the whole range of media.
We're talking TV like Channel nine, radio like three W.
And two GB, and then there's also publications like The Australian Financial Review, The Age, the Sydney Morning Herald.
Now an two years ago, Nine Entertainment announced it would start a share buyback plan where it would buy back up to ten percent of its stock.
Now at the time this was considered quite a signal of strength.
But now, after two hundred and twenty million bucks in share buybacks, nine has announced that it will finish buying back its own shares.
Okay, interesting, juzzy boy, Yeah, why is this all happening right now?
Well, be man Nine's been struggling with a weaker ad market, it's lost the media bargaining deal with Meta, and it's laying off over two hundred of their staff.
So the buyback may not be the best use of its cash right now.
So what is the key learning here?
Share buybacks can be a double edged sword for companies. On the one hand, they sent a very strong signal to the market. We are so confident in our business that we see in no better way to spend our money than to buy more of our very own shares.
And share buy backs typically also result in a higher share price for the company.
Yep. That's because when the company buys back shares, it lowers the number of shares available on the market, and as a result.
It boosts the company's earnings per share.
But on the other hand, Juzzy boy, share buybacks can be a big disaster in some cases.
For some investors, they see a share buy back as a signal that a company's run out of other investment opportunities.
But even bigger disaster is when you buy back your shares and the share price falls. And in Nine's case, its share price has dropped thirty seven percent over the last year.
So rather than continuing to invest in a falling company, Nine decided to put a pause on the.
Buy back because maybe there are now better internal investments to be made to get Nine back on track. For our second story, Airbnb has had its largest share price drop since going public in twenty twenty. That post pandemic holiday revenge really starting to slow down. Juzzy boy, what's going on here?
When airbb launched back in two thousand and eight, was considered a bit of a zany idea to let someone sleep in your spare room or your house while you're away.
But it's crazy how fifteen odd years later everything can change.
Yep, Because now Airbnb has over one hundred and fifty million worldwide users.
Who have booked more than one point five billion stays. If you don't mind, but.
Be man, it seems like those stays are slowing down real fast for Airbnb. Yep.
While Airbnb announced that its bookings increased eight point seven percent in the second quarter, it was well below Airbnb's growth forecasts.
Particularly during this summer period in the US and Europe.
So Airbnb share price dropped more than thirteen percent, which, as it happens jusey Boy, is the largest drop since enlisted in twenty twenty.
Avebman. Some companies have an off quarter, but Airbnb has had three off quarters in a row and now be man. Rather than underperforming again, Airbnb's warned investors of sequential moderation for the next quarter.
In other words, just calm your farm and keep your expectations in check Wall Street, but be man.
The biggest red flag airbb's marketing spend will outpace its revenue in the next quarter.
Not what you want to hear in a slowing market. So what is the key learning here? Marketing spend just be another cost. It needs to be an investment with a strong return, you see, b Man.
Airbnb's always promoted the fact that the majority of its traffic is direct. We're talking ninety percent of their traffic comes from unpaid channels.
And the reason, well, Airbnb CEO claims it's because of its brand strength.
In fact, Airbnb spend just over eighteen percent of its revenue on marketing in twenty twenty three.
But boy, in the upcoming quarter, Airbnb now expects its marketing expenses to grow faster than revenue.
And increasing marketing spend at a time when demand is softening could be a major red flag for investors. For our third and final story, Warner Brothers Discovery has written down the value of all its TV assets over nine billion US dollars and that led them to a ten billion US dollar loss for the.
Quarter Yaikaruni's Juzzy Boy. After losing the NBA broadcast deal this year, this just can't be good for Warner Bros. So what is the story right here?
Okay? Warner Brothers is the entertainment giant that was founded back in nineteen twenty three.
It's the name behind iconic movies like the Harry Potter series, Dark Knight, The Matrix, and b Man.
In twenty two twenty two, Warner Brothers merge with Discovery Channel, added subsidiary channels in a forty three billion US dollar whopper deal, and now Warner Brothers Discovery has written down its PayTV business by a woppin' nine point one billion US dollery dues. Yep, surprise, surprise. They say that they cable channels just aren't worth what they used to be in this uncertain PATV.
Market, And as it happens, juzzy boy, this news sent Warner brother Discovery share price down eleven percent, wow.
To its lowest share price since these two companies merged.
Sounds like this merger hasn't quite panned out the way these two media companies had hoped.
So what is the key learning here?
Even the most well planned mergers have a chance of not reaching their potential see man.
Since Warner Brothers merge with Discovery Channel, the audience size of PATV channels has only gotten smaller.
They're on top of that a mountain of debt softening AD market layoffs at the company last month, and.
It's pretty clear that Warner Broy's merger with Discovery Channel isn't quite panning out as they'd hope.
And Jesseyboy, this isn't as uncommon as you might think.
In fact, according to the Harvard Business Review, some mergers actually have a seventy two percent chance of failure.
But you can dramatically increase the odds of success if.
You understand the select targets, understand how much to pay them and how much to integrate them as well.
So it's not too surprising that Warner Brothers Discovery has been considering a breakup and splitting its streaming and its studio business from its old TV networks black Lam.
If you want to test your business knowledge as well as earn a tasty little bit of cash for the weekend, there is only one place to be. It is in the Flux app playing quick Sticks Today. You receive a notification at a random time of the day, and the first person to answer correctly win's the fifty bucks.
Thanks for listening, and we'll see you on Monday.