This is what the Flux I'm brand and I'm just then, and it's Friday, the thirty first of January.
Does it boy? Three of the four major banks in Australia believe the Reserve Bank will cut interest rates in February. That's after we saw trimmed mean inflation slow by more than even the RBA was expected. The only bank sticking their neck out that would be NAB. They reckon the rate cut will only happen.
In May by themselves the man yep, Fux adam. If you want to stand by yourselves with fifty bucks in your front pocket this weekend, there is only one place to do it. It is in the Flux app playing quick sticks today. If you're the first person to answer three business or finance questions correctly, then you will win fifty dollars, no questions asked. Make sure to download the Flux AUP and turn your notifications on to win it money today.
Three electrifying stories today, Juzzy boy, let's do it for our first zip Co, the buy now, pay later company has seen it. Chares plummet more than twenty five percent after its second quarter earnings fell short.
Been one hell of a rollercoaster for Zibity, DoD aarbe Man, So tell me.
More, Okay? So Zip is an Aussie by now pay Later provider that started in twenty thirteen.
And the Man. From twenty twenty, Zip went on a bit of an acquisition spree.
It bought Quadpay in the US for four hundred mil. It bought Twisto in the European Union, and bought steaks in companies like Payflex, Spotty ten.
Do these names ring a bell? Juzzy boy, but ben Man. When Zip's losses started to grow, its share price started to plummet. So Zip cut all of its divisions except for Australia, New Zealand and the US Soluber.
Surely it's built its business back up and its share price with its Australian business becoming profitable, but.
Now be Man. Zip's announced its second quarter results, which on paper look pretty good.
Ebit up more than fifty percent from the same quarter last year.
Revenue up more than twenty percent as well.
But its profit margin was squeezed tighter than your jeans after your big summer break, jussy Boy.
And be Man that had investors running to the paddic button. Zip share price dropped more than twenty five percent.
In fact, trading volumes in Zip yesterday jumped over three times the norm.
So what is the key learning here?
When a company has a history of share price volatility, investors are way more sensitive to any bad news.
You see, be Man. When trading volume skyrockets, it usually means one of two things. Investors are either panic selling or greedily buying in And in Zip's case, it was a full blown sell off. Might I remargi be Man? Between March twenty twenty one and October twenty twenty three, Zip's investors lost ninety eight percent of their share value on paper.
Luckily, ZIP has bounced back and they've been on a positive trajectory recently.
But even though revenue and ebitdaua up, that squeeze profit margin had everyone hitting the cell battery.
For our second story, Tesla's a revenue and profit fell short of expectations after major discounting of its cars, but they're planning to get even cheaper.
Oh, Tesla owner's rolling around in their heated seats because their resale value has been smashed.
So don't we more well, Jazzy Boy. Tesla was the og Electric vehicle company founded in two thousand and three.
Fun fact, b Man. While Elon Musk is considered the founder of Tesla, he actually joined the company as chairman about twelve months after a.
Launch, and two thousand and nine court settlement allowed him to technically call himself a founder.
The founder or not. Elon Musk has propelled Tesla to enormous heights. Tesla became the go to car for electric vehicle officionados.
In fact, Tesla was more valuable than thirty five of the next biggest car made now.
But now be man At Tesla's warned that its fourth quarter results were well below expectation.
In fact, its revenue of twenty five point seven billion US dollars was nearly two billion dollars below what Wall Street expected.
Chuck. On top of that, it's gross profit margin dropped more than two percent below expectations. And what's the reason for the squeeze in revenue and profit margin will be man at.
Tesla has been discounting its cars, so rather than continuing to discount its existing models, Tesla has announced plans for a new model in the first half of twenty twenty five.
So what is the key leading here?
As industries, mature prices tend to fall, margins tend to shrink, and only the strongest survive.
You say, be Man. In the early stages of an industry, companies can charge premium prices.
That's because there are fewer competitors and higher demand for this innovation of new product.
And this is exactly what Tesla experienced in the EV market in the early day.
In fact, its entry level roadster in two thousand and eight was one hundred and twenty thousand dollars and be man.
In the early twenty tens, Tesla's gross profit margin was nearly thirty three percent.
But as competitors enter the space, pricing pressure it builds and builds.
And that meant EV companies like Tesla are forced to differentiate through pricing, by offering cheaper models or through unique features like software technology and b man. As a result, Tesla's gross profit margin has more than half to sixteen point three percent.
So Tesla now finds itself in a battle against cheaper EV manufacturers like Bid and even Volkswagen. For our third and final story, Meta will pay Donald Trump a twenty five million dollar settlement for shutting his accounts after those January six riots.
Jeez, the Zuckerberg uturn just keeps on keeping on, b man, So telling me.
More well for some context, Juzzy Boy. After the jan six riots in twenty twenty one, which Donald Trump inspired, it's fair to say old Trumpy wasn't so popular in big tech.
Circles, in particular with Meta.
In fact, Trump used to say that Mark Zuckerberg Facebook slash metas founder would spend the rest of his days in prison.
Very scary stuff for me, man. These days things have changed.
Trump's Facebook and Instagram profiles were reinstated in twenty twenty three, and.
Since Trump's reelection, Zuck has really cozied up to the new administration.
And now Meta has settled a lawsuit with Trump that will require Meta to pay about twenty five million bucks to him and his entities.
The new President's relationships with business leaders are very transactional.
It seems the Zuck likes to fly in the political breeze.
So what is the key learning here?
Most businesses don't lean red or blue politically, They lean green.
AKA, it is all about the dollars.
And Meta is up there with the very best of them.
We know that Zuck is capable of aligning himself with those in power.
Yep. Zuck attended Trump's inauguration and donated one million bucks to the Inaugural Fund.
He also traveled to Mara Lago in November to me with Trump after the election, and this could pay off handsomely for Beta, particularly when it comes to future regulation in the US and around the world for social media blocks. An make sure you are on the Flux app, you have your notifications turned on, to win at Money today, and have fifty bucks in your pocket. All you got to do is make sure you're the first person to answer the three business questions correctly, and it is all yours.
Thanks for listening, and we'll see you on Monday.