Hey hey Flux fam 👋

Here's everything you need to know today - in under 3 minutes.

Today's big stories: 

💰 ANZ makes an offer to buy Cashrewards for $100 million

🐶 Marley Spoon is launching a new pet food service

🚀 Donald Trump's media company is soaring 

Oh and get this...

The whole world is poppin' bottles...literally. Champagne sales have surged back to pre-pandemic levels, with around 305 million bottles expected to be sold this year, up from 244 million in 2020. Cheers!

You'd hate to miss out...

We're dropping exclusive content to help you whip your credit score into shape - and smash your financial goals.

ANZ is buying Cashrewards for $100 million... and is there cashback on that?

Background: ANZ is one of Australia's biggest banks, and Cashrewards is an Aussie company that launched back in 2014. It lets members receive cash back on every purchase from partnering retailers. Win!

What happened: In the last financial year, Cash rewards drove around 3.5 million transactions to retailers. And while that sounds juicy, in reality, Cashrewards' profit margins ain't that flash, 'cos most of it goes to members. 

What else: Now, ANZ is offering $100 million to buy Cashrewards, which is actually 35% lower than the company's valuation at its initial public offering last year. 

So what's the key learning?

💡ANZ's big, fat investment into the cashback game, suggests a big, fat bet against the buy now, pay later industry. And ANZ have been pretty clear about this.

💡Ya see, retailers pay cashback companies a referral fee for helping them acquire a customer. Retailers also pay buy now, pay later companies a 'merchant fee' for helping acquire a customer. So it becomes very expensive for retailers to pay both fees on the same transaction.

💡So now, Cashrewards is not only competing against its competitors in the Cashback space - but also BNPL providers. Which may have become all too much for Cashrewards.

Time to cough up 'cos Marley Spoon is making bougie food for pets

Background: Marley Spoon is the ASX-listed home meal-kit company that launched back in 2014. 2020 was a pretty great year for them. The crew almost doubled the number of Aussie customers (thanks COVID). 

What happened: Investors became pretty cautious as the world opened up, less people will wanna cook for themselves. And then, Woolies pulled the pin on their investment in Marley Spoon a few weeks ago. Ouch.

What else: But now, Marley Spoon has started a new biz called bezzie (like bestie), to deliver pet food for ya furry friends. You tell them about your pet...and they’ll give you a customised meal plan and meal delivery.

So what's the key learning?

💡Premiumisation is when companies emphasise the quality and exclusivity of a particular brand or product. And this phenomenon has hit the pet food market. Hard.

💡In 2020, Aussies spent 35% more time with their pets. On top of that, people are delaying marriage and kids. So instead of real babies, we have fur babies.

💡This humanisation of pets has led to premiumisation in pet food. Move over dry biscuits, Henry the Cavoodle wants Wagyu beef. In fact, pet owners are spending around $21.9 billion on their fur babies each year.

Donald Trump's media company is on the IPO rocket to the moon

Background: Former US President Donald Trump owns a few companies. Trump Financial...Trump Sales and Leasing...The Trump National Doral gold resort...And now, Trump Media & Technology Group.

What happened: That last one is real new. The world found out about Trump's new venture last week, and there ain't much info about it. Except, that its mission is to "create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley".

What else: Trump's company revealed it was going public via a SPAC (special purpose acquisition company) called Digital World Acquisition Corp. That SPAC saw its shares soar as high as 284% and its market cap rise to US$1.64 billion.

So what's the key learning?

💡A special purpose acquisition company (aka SPAC) is a company formed specifically for the purposes of raising money. And it raises this money through an initial public offering.

💡It may sound weird but at the time of the SPAC’s IPO (ie Digital World Acquisition Corp), it has no existing business operation or even targets for acquisition. Essentially, they are just a blank cheque. 

💡While normally, SPAC companies will acquire another company with a history or growth and has runs on the board (think: WeWork) - Trump's company had zero history, so we'll need to see if this is built to last...or Gamestonk #2.