A little-known Hong Kong-based company appears to have become the latest obsession of traders on the popular Reddit forum WallStreetBets, helping its stock shoot up 21,000 per cent since its IPO less than a month ago.
Shares of AMTD Digital have spiked nearly 3,000 per cent over the past week, and were up 126 per cent on Tuesday alone.
The company debuted on the New York Stock Exchange on July 15, listing its shares at US$7.80 ($11.24) apiece. Since then, the price has jumped to US$1,679 ($2,419).
A trader works on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg via Getty Images (Bloomberg via Getty Images)
AMTD Digital is a financial services startup that trades on the New York Stock Exchange under ticker symbol “HKD”.
The company is an arm of AMTD Idea Group, an investment bank based in Hong Kong that is also listed in New York and Singapore. The unit was founded in 2019, and provides fintech services in Asia, including a virtual bank called Airstar.
AMTD Digital brought in just over US$25 million in revenue last year, according to a regulatory filing. And yet this week its market cap is more than US$310 billion, surpassing that of Shell and Costco and putting it closer to the size of Walmart and Exxon.
Even the company was scratching its head over the sudden surge.
“To our knowledge, there are no material circumstances, events nor other matters relating to our company’s business and operating activities since the IPO date,” the company said in a statement.
Even AMTD Digital managers were scratching their heads over the sudden surge. (Google Maps)
Its parent company has also benefited from the mania. AMTD Idea Group was the number one trade on Fidelity’s platform on Tuesday, and its stock jumped nearly 237 per cent in New York.
The frenzy is reminiscent of the January 2021 run-up in shares of GameStop and AMC, which both saw historic upticks after retail investors on the WallStreetBets subreddit seized on what they saw as the companies’ undervalued stocks.
One user on the forum pointed to the similarities Wednesday, asking whether this was “another GameStop AMC situation.”
“Where did AMTD Digital come from,” they wrote.
There appeared to be no specific reason for the rally, other than online users in recent days calling for people to pile into the shares.
It worked: on Tuesday, the company was one of the most traded stocks on Fidelity, according to the investment firm.
Two iconic Australian brands have joined forces to create a frozen treat that many will be lining up to get their hands on.
Golden Gaytime has teamed up with OAK to create a chocolate twist on the iconic ice cream.
The treat has an OAK-inspired ice cream centre, dipped in a layer of chocolate, and is smothered in Golden Gaytime’s famous delicious biscuit pieces with a choccy twist.
Streets spokeswoman Annie Lucchitti said: “Golden Gaytime has been an Aussie favorite for over 50 years and we’re known for some pretty impressive flavor experiences!
“Golden Gaytime OAK brings the iconic elements of Golden Gaytime together with the unmistakeable OAK Choc Milk flavor hit. It’s creamy, crumbly, choccy – delicious.
“It’s a crowd pleaser that’s for sure. We’re ecstatic to be bringing the next level of Golden goodness to market!”
The release of the new ice cream will be staggered, hitting the shelves exclusively at IGA and Ritchies stores on Thursday, August 4.
In September, Golden Gaytime OAK will be available in Coles, petrol stations and convenience stores.
The ice creams can be purchased in a box of four for $9.50.
It’s the latest collaboration from OAK, after Allen’s beloved Milk Bottles were transformed into OAK-flavoured lollies.
The confectionary company revealed in July the beloved brands were collaborating.
The Milk Bottles come in two OAK-inspired packs and come in two flavours.
One is an Oak-inspired iced coffee – a chocolate and malt blend.
The second is strawberry, with the new Milk Bottles being sold as standalone bags of lollies.
Cryptocurrency lender Celsius Network was advertising yields of 17 per cent right up to mid-June when it froze withdrawals and then filed for bankruptcy in New York one month later.
Marketing itself much like a bank but without the same regulations, it attracted a global customer base — including Australians — many of whom had their assets locked up as cryptocurrency prices collapsed and the company ran aground.
The plight of these retail investors was spotlighted in recent weeks by software engineer and frequent cryptocurrency critic Molly White, who began to tweet moving excerpts from hundreds of letters sent to the New York bankruptcy court and shared in court exhibits.
“The stereotype of people who are putting money into crypto is… young, technologically savvy men,” Ms White told the ABC.
“And that did not seem to be the demographic in the letters.
“There were also a lot of people who were saying, ‘this is my life savings, my pension, I worked 10, 20, 30 years to save this money.'”
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Ms White also shared letters from people who said they were based in Australia, many of whom described their utter desperation and even thoughts of suicide after they were blocked from accessing funds.
One woman said the impact on her family had been severe. She included an email she sent to Celsius management begging to be allowed to withdraw some of her funds from her. The email included an ultrasound picture of her unborn child from her.
Others wrote of their emotional turmoil:
“I have lost everything. How can I explain this to my son? I feel ashamed at myself.”
“That was our life savings. It was our chance of having a baby, and funding medical expenses. It was our chance of taking care of our parents as they age.”
A father of three in Australia wrote he had “his life savings in a Celsius earn account”, and that he’d also convinced his father to deposit cryptocurrency assets into Celsius as a “safe haven”.
As well as putting a personal face to the cryptocurrency crash, many of the letters cite the online presence of Celsius chief executive Alex Mashinsky as a key reason for investing.
They bring up his regular YouTube AMA or “ask me anything” sessions, in which he projected supreme confidence until the end, and a willingness to call out what he saw as “misinformation” about his company on Twitter.
Ms White was also struck by how many letters specifically cited Mr Mashinsky, and his online persona.
“Those [AMA sessions] clearly worked really well to build trust in him and in the platform,” she said.
“And people basically believed that Alex Mashinsky as a person would not do this to them.”
Celsius CEO Alex Mashinsky in November 2021, when bitcoin was riding high.(Getty: Piaras Ó Midheach)
‘We’re at the bottom, and we’re trying to be loud’
Claire* is one of the Australians with assets locked up in Celsius who wrote to the judge.
She returned to Australia in 2020 after more than a decade living in the United States, and was after a career change. A university course in financial technology introduced her to cryptocurrencies, and she took a shine to the industry.
But Claire said she struggled to find a job in the field and when trying to start her own businesses, found that Australian banks wouldn’t lend her due to a lack of local credit history.
A US cousin introduced her to bitcoin mining, and she ended up locking away around $US50,000 worth of bitcoin as collateral for a loan from Celsius.
“I was very attracted to their loan facility, because I couldn’t get a loan here for anything,” she said.
“Cryptocurrency for a person who is in that situation is… more attractive.”
While she is not in as dire a situation as some other Celsius customers, Claire said the goal of writing her letter was to ensure the voices of smaller investors were heard as the company’s debts are considered.
It’s still unclear how the process will play out.
Celsius’s terms and conditions warn that an account with the company is “not a checking or savings account, and it is not covered by insurance against losses” and that “any Eligible Digital Assets … may not be recoverable” after bankruptcy.
“The big guys will get the lawyers and they will be loud,” she said.
“We’re at the bottom, and we’re trying to be loud.”
Risk not over for Australian investors
Celsius had approximately 300,000 active users with balances of more than $US100 ($144) as of July 2022, and a $US1.2 billion shortfall when it filed for Chapter 11 bankruptcy in the Southern District of New York.
The company offered a number of services, including the ability to borrow against cryptocurrency assets transferred to the company, or to earn high reward rates on these deposits.
But while its team presented a glossy picture of huge yields, it seemed impossible to some critics that such numbers could be sustained without making potentially hazardous investment choices with the funds of its international depositors.
Campbell Harvey, a professor of finance at Duke University, said the Celsius situation was ultimately simple: “This is a company that basically took customer deposits, if you want to call them that, and then invested in very risky products.”
Among other issues, Dr Harvey said, Celsius appears to have invested in cryptocurrency products that were highly illiquid when the company needed money back quickly.
“Any time you’re promised an 18 per centreturn that is sold as risk free, that is just a red flag,” he said.
Celsius’s bankruptcy filing continues a rough period for cryptocurrencies, and other high-profile platforms including Babel Finance, Vauld and Voyager have run into trouble in recent weeks.
Celsius’s own bankruptcy documents admit it made “what, in hindsight, proved to be certain poor asset deployment decisions.”
Mr Mashinsky’s declaration also cites the high-profile “implosion” of cryptocurrency Luna and its TerraUSD stablecoin as accelerating the onset of a “crypto winter” and prompting an uptick in customers trying to get their money out — akin to a bank run.
The Celsius situation also makes the risks clear for Australian cryptocurrency investors: overseas companies are subject to overseas rules.
Aaron Lane, a lawyer and senior research fellow in the RMIT Blockchain Innovation Hub, said how much local investors ultimately recovered from Celsius was now in the hands of US courts, where cryptocurrency bankruptcies were a relatively new phenomenon.
“That’s something that consumers need to consider at the front end … doing your research and really considering who controls the cryptocurrency that you’re putting in,” he said.
Both Dr Lane and Dr Harvey suggested Celsius’s situation, as well as the litany of other cryptocurrency collapses, was likely to spur government regulation of the industry.
This may include whether cryptocurrency lenders like Celsius will be forced in future to abide by rules set for more traditional financial institutions, such as capital requirements to protect depositors.
“How can consumers know that if they’re putting money into one of these platforms that they can get it back, or at least get a proportion back?” Dr Lane said.
Ms White says there’s a pattern in how cryptocurrency projects are allowed to operate that can’t continue.
“Crypto projects do whatever they want, advertise however they want, run their businesses with basically no transparency and no requirements for how they’re handling their assets, and then [regulators] just wait for them to explode,” she said.
“We can’t afford to have done it as long as we have. People are continuing to get hurt.”
Australian Mercedes-Benz dealers are in a $650 million “fight of their lives” against the luxury German car maker in a test case described as one of the most significant in franchise-law history.
Key points:
38 Mercedes dealers are suing the German car-maker for $650 million in compensation
Mercedes-Benz is one of a growing number of car makers switching to a fixed sale price and commission model
Car dealers argue Mercedes has breached the franchising code and consumer law
Bob Craig sold his dealership of 48 years last year in frustration over Mercedes-Benz’s decision to move to a fixed-price agency sales model.
“I would love to have done 50 years with Mercedes,” Mr Craig said.
“In the last five years, there was a deterioration in relationships between the dealer and the manufacturer.”
Previously, dealers bought cars from Mercedes and could set their own sale price.
But under the agency model, which came into effect in January, the manufacturer retains ownership of the cars while dealers become agents that sell cars at a fixed price for a set commission.
Thirty-eight of the nation’s 55 Mercedes-Benz dealerships have launched legal action against the company in the Federal Court seeking compensation.
Dealers argue they were forced to sign new agency model deals with Mercedes that will dramatically reduce their profits and wipe out years of goodwill with customers.
Mr Craig is not involved in the court case because he sold his business in Orange before the agency model came into effect, but he is speaking on behalf of former colleagues too nervous to publicly criticize Mercedes.
“They’re all shattered, their livelihood is shattered,” Mr Craig said.
A photo of Bob Craig’s Mercedes-Benz dealership in Orange from the 1970s.(ABC News: Hamish Cole )
Dealers allege Mercedes hatched a secret plan in 2016 to switch to an agency model, undertook a sham consultation process, and pushed forward with a decision despite the majority of Australian dealers being against it.
They claim that in a bid to capture the profits of dealers, Mercedes has broken Australian Consumer Law by engaging in unconscionable conduct, along with breaching the franchising code’s good-faith provisions.
“This is an incredibly important case for the automotive industry,” Australian Automotive Dealer Association (AADA) chief executive James Voortman said.
“In fact, it’s probably one of the most important franchising cases in Australian history.”
James Voorten says dealers are arguing Mercedes-Benz has engaged in unconscionable conduct and breached its good-faith obligations.(ABC News: Matt Roberts )
Dealers involved in the case are seeking $650 million in compensation from the car marker.
“That takes account of all the millions of dollars of investment that has gone into facilities, but also equipment and the goodwill they’ve created,” Mr Voortman said.
“It’s a large claim, but it’s more than fair.”
“These are regional dealers, these are city dealers, they are Australian businesses, and they’re in the fight of their lives against a big multinational corporation.”
In March 2019, Deloitte modeled the impact of the agency model for dealers.
It found, for example, that under the agency model one particular dealer’s profits would decline by more than 50 per cent compared to the dealership model.
The case against Mercedes, which saw hearings begin in the Federal Court this week, is being funded by dealers involved in the legal battle, including billionaire businessman Nick Politis, the PR company working for AADA has confirmed.
“So many of these dealers have represented the brand for decades, they’ve invested so much money in the brand, and they’ve put in so much work to bring customers to the brand,” Mr Voortman said.
“And now all of that hard work is being taken away with change to a new business model.
“They need compensation for that change, and we hope that the court agrees with that.”
Test case for updated franchising laws
Last year a Senate inquiry, launched after General Motors decided to ax the Holden brand, found an inherent power imbalance between car dealers and manufacturers.
The inquiry also examined Japanese car manufacturer Honda’s treatment of dealers in its move to a fixed-price agency model.
Subsequent legislative changes introduced by the Coalition government doubled fines for breaches of the franchising code, and added other protections for car dealers, including “fair and reasonable compensation for franchisees in the event of early termination.”
Jenny Buchan from the University of New South Wales’ Business School said the Mercedes-Benz Federal Court legal battle was a test case for those new laws.
“So since 2015, there have been progressive slight tweaks to the code, and the current tweak is probably the biggest that we’re dealing with,” Ms Buchan said.
“The current tweak introduces very specific requirements in relation to motor vehicle dealers and the franchise agreements that they enter into.
“It is an important case, and it’s really important that the dealers have their day in court, and that the courts have an opportunity to really interpret the wording of this new change to the franchising code.”
Jenny Buchan says the case against Mercedes-Benz is one of the most significant in franchising-law history.(ABC News—Dan Irvine )
“The problem with good faith is that good faith is such a nebulous concept,” Ms Buchan said.
Ms Buchan said a recent case involving 7/11 franchisees showed the difficulty of mounting legal arguments based on a breach of good faith and unconscionable conduct.
“They were unsuccessful [at] alleging good faith, they were unsuccessful with unconscionable conduct,” she said.
“But they did succeed in establishing that 7/11 had misled them, so they did receive an award of damages in relation to the misleading conduct.”
Ms Buchan believes that ultimately Australia’s franchising code is still too weak to protect franchisees.
“My really deeply held view is that the franchising code can never give franchisees the protection that they ultimately need, and that we won’t really see true equality until franchisees are somehow brought in under the corporations act,” she said.
Transparent sales model
In a statement, a spokesman for Mercedes-Benz Australia said the company was defending its position in court.
“It is evident Australian customers had embraced the new and transparent sales model,” the company spokesman said.
“We remain committed to the agency model and the advantages it delivers for our valued customers, especially in terms of transparent pricing, the reduction of dealer delivery fees and access for all Australians to our national pool of vehicles, regardless of where the customer may live.” .”
Car industry analyst Steve Bragg, partner at Pitcher Partners, said the agency model had been in place in New Zealand for several years and was becoming widely adopted in Europe and the UK.
Jaguar is another global car manufacturer with plans to move to an agency model. (Reuters: Aly Song)
Jaguar, BMW, Land Rover, VW and Honda are just some of the other companies moving to a fixed-price sales model.
Mr Bragg said a potential upside for customers in buying through an agency model was price transparency — as long as they were not paying too much.
“It’s a model that’s coming, but that doesn’t mean the dealers have to lose,” he said.
“In the future, as dealers are doing their part, they’ll need to be compensated as well — and what they get paid needs to cover costs.”
‘Not the company we recognised’
Bob Craig owned a Mercedes-Benz dealership for 48 years.(ABC News: Hamish Cole )
As direct online sales grow and more companies move to bypass dealers and maximize profits, the agency model represents the end of an era for industry veterans like Mr Craig.
“In a country town, the motor dealer — not just Mercedes, but every franchise — is a great part of the community,” Mr Craig said.
“Our customers are our friends and they (dealers) are part of the fabric of our city.
“I don’t want to be the cranky old man that sold out [of the dealership].
“But in the last few years, it’s not the company that we recognised.”
Construction giant tells DOZENS of staff they will be sacked via Microsoft Teams – as the building company confirms major ‘restructure’
Metricon announced it would reduce its NSW sales staff down to 18 employees
Redundancy payments and redeployment was not offered to 15 trainee staff
In a statement read out to staff, Metricon said its decision was not made ‘lightly’
By Antoinette Milienos For Daily Mail Australia
Published: | Updated:
Building giant Metricon has fired dozens of its sales staff via an online video chat as the company confirms it is in the middle of a restructure and will shed jobs.
In a Microsoft Teams video chat on Monday, Metricon told its staff it would cut its NSW sales team, which is roughly 60 employees, down to 18 and would let go 15 trainee sales consultants.
Staff unable to be redeployed were offered redundancy payouts while trainee staff were terminated without job offers elsewhere in the company or severance payments.
In a Microsoft Teams video call, Metricon announced it would cut its NSW sales team, which is roughly 60 employees, down to 18 and would terminate 15 trainee sales consultants
Metricon’s NSW state sales manager David Shorten reportedly read out a statement to staff which explained the decision was ‘not undertaken lightly’ but was made for the company’s short and long term goals.
‘To better accommodate and reflect the requirements of the current market and ensure the most appropriate deployment of resources, we have undertaken an important review of the sales team,’ Mr Shorten read, according to news.com.au.
‘This is necessary to ensure we remain competitive in both the short and long term. The review was not undertaken lightly and has resulted in proposed changes to the current structure of the team.
‘We understand that you may feel anxious at this time and that you are likely to have a number of questions. Under the proposed structure, the number of new home advisors will be reduced to 18.’
Employees have until 12pm on Wednesday to offer their ‘thoughts, insights or feedback’ regarding the restructure while terminated employees will be informed by the end of the week.
The construction giant said it will select the most ‘appropriately skilled individuals’ for the limited remaining roles at the company.
Those who turn down an opportunity to remain with the company may not be entitled to redundancy payments.
A statement letter (pictured) was read out to employees explained the company’s staff restructure
It comes as construction companies in Australia are unable to meet fixed price contracts as they face mounting financial challenges caused by supply chain issues, labor shortages and the soaring costs of raw materials.
‘With the current headwinds buffeting the industry, specifically labor costs due to competition for skills, combined with present global material cost hikes and with our very strong existing pipeline of work,’ Metricon’s Acting CEO Peter Langfelder said in a statement given to Daily Mail Australia .
‘We need to carefully balance the pipeline of new builds with the construction side of the business.
‘We are working to restructure our front-end of the business given the current climate and the need to move forward efficiently.
‘We are committed to looking after any of our people who may be impacted by these proposed changes, and they will continue to have ongoing access to the company’s support and mental health services.’
Metricon’s financial stability was under intense scrutiny earlier this year before its lender, Commonwealth Bank, agreed to a rescue deal in May.
Metricon held crisis talks amid cashflow pressures after its founder, Mario Biasin, 71, (pictured) suddenly died on May 16
Mr Langfelder said the company’s owners would also give $30million to help the business.
In early May sales staff were reportedly told to increase cash flow by securing more deposits.
Metricon held crisis talks amid cashflow pressures in the building industry after its founder, Mario Biasin died on May 16.
The company confirmed the ‘sudden and unexpected’ death of Mr Biasin and added the 71-year-old had been ‘experiencing mental health issues’.
Last month, Metricon listed at least 56 display properties worth almost $65million for sale despite reports the company was struggling financially.
The sales include homes in Victoria, New South Wales, South Australia and Queensland ranging from $650,000 to $3.2million.
Daily Mail Australia has contacted Metricon for comment.
On Tuesday, the S&P/ASX 200 Index (ASX: XJO) fought back from a tough start to record the smallest of gains. The benchmark index rose 5.1 points to 6,998.1 points.
Will the market be able to build on this on Wednesday? Here are five things to watch:
ASX 200 expected to edge lower
The Australian share market looks set to have a subdued day on Wednesday following a poor night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning. In late trade on Wall Street, the Dow Jones is down 1.1%, the S&P 500 has dropped 0.5% and the NASDAQ is trading a fraction lower.
Oil prices rise
Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a better day after oil prices rebounded overnight. According to Bloomberg, the WTI crude oil price is up 0.35% to US$94.22 a barrel and the Brent crude oil price has risen 0.2% to US$101.26 a barrel. This was driven by supply concerns ahead of the OPEC meeting.
Virgin Money UK Q3 update
the Virgin Money UK (ASX: VUK) share price could have a decent day. The UK based bank’s shares pushed higher on the LSE overnight after investors responded positively to its third quarter update. That update revealed that its net interest margin improved to 187 basis points. This reflects higher rates, deposit spreads, and higher yielding lending mix, which were offset by ongoing mortgage spread pressure.
Gold price drops
gold miners Evolution Mining Ltd. (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the slide today after the gold price traded lower overnight. According to CNBC, the spot gold price is down 0.45% to US$1,779 an ounce. The precious metal dropped despite increasing recession fears.
Pinnacle results
the Pinnacle Investment Management Group Ltd (ASX: PNI) share price will be on watch today when the investment company releases its full-year results. According to a note out of Morgans, its analysts are expecting the company to deliver FY 2022 net profit after tax of $75.3 million, up 12.3% on the prior corresponding period.
Jeff Bezos’ unfinished mega yacht was towed away from a Dutch shipbuilding yard before dawn Tuesday just weeks after Rotterdam residents threatened to pelt the luxury vessel with eggs if the city went through with plans to dismantle a landmark bridge to make way for the $500 million ship .
The 417-foot long, three-masted yacht, which goes by the name Y721, was relocated from the Oceanco shipyard in Alblasserdam to the Greenport yard just 24 miles away in Rotterdam, according to the German-language daily Der Spiegel.
Video of the towing was posted to YouTube by Dutch yacht enthusiast Hanco Bol.
“We never saw a transport going that fast,” Bol writes of what he witnessed. It took less than three hours for the ship to travel southwest along the Noord canal even though it normally requires nearly twice as much time to traverse the route, according to Bol.
He speculates that Oceanco, the company that was commissioned to build the yacht, chose the timing of the move in order to keep it under wraps given the considerable publicity it has generated.
Rotterdammers who were furious about plans to dismantle “De Hef” bridge, also known as Koningshaven, had threatened to pelt the yacht with eggs if it made the journey.
Bol writes that the yacht’s route was designed to avoid traveling through the Rotterdam city center and underneath “De Hef” — even though it would have saved more time.
Oceanco last month announced that it had dropped its request for the Rotterdam city council to approve the temporary dismantling of the bridge.
The company had indicated that Bezos, the Amazon founder and second-richest person in the world, was willing to foot the bill for the removal of the middle section of the span so that the yacht would be able to sail through the Nieuwe Mass River.
Bol speculates that Oceanco intentionally avoided towing the unfinished yacht underneath “De Hef.”
“I think that was intentional,” he told Der Spiegel.
“When I was standing on one of the bridges, they shined a searchlight on me, so it wasn’t easy for me to take pictures.”
According to Dutch media reports, it will take several more months for the ship to be completed.
The Post has reached out to Amazon and Oceanco seeking comment.
This article was originally published by the New York Post and reproduced with permission
Flights leaving one Australian airport have had the largest delays in the entire country, with almost 70 per cent of planes delayed.
Figures, released by the Bureau of Infrastructure and Transport Research Economics report, found less than 30 per cent of flights headed from Broome to Perth left on time, the worst route in the entire country.
The report looked at delays and cancellations across all major Australian airport in the month of June.
Airlines included in the report were Virgin Australia, Qantas, Jetstar, QantasLink and Rex Airlines.
The figures for on time arrivals in June reached all time lows for all 58 travel routes looked at.
Qantas recorded the highest percentage of cancellations at 8.1 per cent during the month, followed by QantasLink, Virgin Australia, Jetstar, Virgin Australia Regional Airlines and Rex Airlines.
Australia’s signature airline company Qantas recorded just over half of their airlines arrived on time in June, at 59 per cent, while Virgin achieved the highest level of on time departures among the major domestic airlines at 60 per cent.
A Qantas spokesperson told NCA NewsWire these flight delays and cancellations are not the kind of performance that they were delivering pre-Covid.
“A rise in COVID and other illnesses among airline crew as well as the tight labor market led to flight disruptions for all domestic airlines in June.” they said.
“We had rostered additional crew on standby which helped lessen the impact of COVID-related crew absences and meant 85 per cent of our domestic flights for the month departed within an hour of schedule.”
“Flight cancellations in July were lower than they were in June, call center wait times are now better than they were pre-COVID and our mishandled bag rates are close to what they were before the pandemic.”
Mildura Airport, which is located in northwest Victoria, recorded the lowest percentage of on time arrivals sitting at more than 47 per cent, while Alice Springs Airport recorded the highest rate of on time arrivals at 87 per cent.
Cancellations were highest on the Sydney-Melbourne route at 15.3 per cent, followed by the Melbourne-Sydney route at 14.9 per cent, and the Sydney-Canberra route at 11.1 per cent.
The report follows after more than 21 flights were canceled in Sydney across the Qantas, Virgin Australia, Jetstar and Rex networks on Tuesday.
Virgin dumped 10 flights, Qantas nixed eight, with two pulled from Jetstar and one from Rex, combined with an additional 20 flights scrapped at Melbourne Airport as of 8.30am on Tuesday.
Both domestic and international flights with major aussie airlines alongside Emirates, British Airways and American Airlines were also dumped on Monday between 6.30am-7am.
Demand is weakening across the board. New mortgage lending shrank at the fastest pace in more than two years in June, according to separate official figures published this week. The PCI, published by Ai Group and the Housing Industry Association, shows housing activity weakened for a third month in July.
The monthly index of activity in detached house building – based on a sentiment survey of purchasing managers in the sector – fell 4.6 points to 34.6 points on an index where a figure below 50 indicates contraction.
‘End to the boom’
“Confidence in the housing sector has been adversely impacted by rising rates which will compound the rise in the cost of construction,” HIA economist Thomas Devitt said.
“This has not yet materialized in slowing sales or approvals of new homes and there is still a large volume of building work in the pipeline to complete. Recent declines in confidence … reflect an anticipation on the part of builders of less new work entering the pipeline in coming months as the RBA’s current tightening cycle will, inevitably, bring an end to the boom.”
For a company such as Metricon, which expanded rapidly thanks to the federal government’s HomeBuilder scheme and other stimulus programs – its dwelling commencements surged 33 per cent – that means a huge hangover has set in as it is crunched by surging material costs and labor shortages.
Metricon, which had 6052 housing starts last year, said on Tuesday it had started a consultation process with affected staff that would lead to redundancies.
Mr Langfelder said Metricon expected to continue to sign 100 contracts a week, in line with pre-pandemic levels, and that it expected more than 6000 housing starts next year.
The Gold Coast and Brisbane home building markets have suffered some of the biggest increases in overall construction costs, in residential and commercial, and it was in these markets that Metricon earlier this year tried to renegotiate higher prices with contracted customers, before giving up on the idea.
In mid-May, the builder also suffered the sudden loss of founder and chief executive Mario Biasin, who was said to have experienced mental health issues.
It is not the only home builder caught between fixed-price contracts and rapidly rising costs. Sydney-based Rawson Group last year received a $40 million loan from parent company Daiwa House to help it trade through the current tough conditions.
“This quarter, we have marked down a small subset of late-stage companies that have a large impact on our funds’ holding value.
“These markdowns aren’t a reflection of our conviction in the relevant companies. They’re an acknowledgment of comparable movements in public for our material, late-stage positions.”
While AirTree’s accounts have been audited since the fund launched in 2014, it was the first time it had an independent valuation conducted, which was done by big four accounting firm EY.
The move by AirTree follows the country’s other biggest VC funds, Blackbird Ventures and Square Peg Capital, which also marked down Canva by 36 per cent to $US25.6 billion, wiping $US14.4 billion of its value.
It is understood the local funds joined forces to get an independent assessment of Canva’s valuation, with the support of the superannuation funds invested in them, leading to the consistency in their mark-downs.
The decision from the local VCs followed US-based investors Franklin Templeton and T.Rowe Price making moves earlier this year to mark down the value of Canva in some of their funds.
right-balance
As part of AirTree’s quarterly update to investors, it also shared performance metrics of its funds, stating that to date, it has had 11 full or partial exits, at an average of 2.1 times the value in AirTree’s books.
“This gives us some comfort that we’ve struck the right balance on holding valuations,” AirTree wrote.
Other later-stage companies owned by AirTree include Employment Hero, Pet Circle, education marketplace Go1 (which recently doubled its valuation and raised another $US100 million) and residential solar power buy now, pay later financier Brighte, which laid off 15 per cent of its workforce in June.
AirTree also revealed in its letter that it had sold part of its core 2014 fund last year, which delivered a 3.3 times return on capital to investors, and realized an internal rate of return of 80 per cent, putting it in the top 5 per cent of funds globally of that vintage.
AirTree managing partner Craig Blair said the fund expected to maintain its historical pace of investment, despite the tech market downturn, and AirTree’s focus would be on backing companies that were still early in their journeys.
“Like any industry, we can make mistakes and get too far over our skis and calling us out and being grounded is important if you’re serious about building a long-term venture fund,” he said.
“Yes, we have companies that may not make it. Failure is apart of our industry. But, at the core, we have very, very smart, talented people choosing careers in entrepreneurship… and we firmly believe tech will solve some of the world’s biggest problems, be it in energy, health or food.”
The VC fund announced in February that it had raised $700 million across three new investment vehicles, including the biggest seed fund in the country, and a dedicated fund for Web3 companies.
State of the market
In the first six months of the year AirTree invested more than the fund did at the start of 2021, in contrast to Blackbird and Square Peg.
There has been a substantial contraction in deal values and volumes across the local market, with the latest Cut Through Venture figures indicating $228 million was invested across 35 deals in July. This was almost two thirds less than the previous year, and down $181 million on June this year.
The tough funding market has led start-ups to lay off staff and alter investment plans to extend their capital runways. Some have also already collapsed, including IPO hopeful Metigy which was raising capital at a $1 billion valuation, a property tech start-up founded by an ex-Macquarie Group team called Yabonza, and multiple grocery delivery players.
While the AirTree letter said the next few years hold a “unique opportunity” for companies that can operate efficiently to recruit more easily and take market share, the VC cautioned that capital efficiency would be paramount.
“For those unable to extend runway sufficiently, we’ll lean in to help portfolio companies fundraise,” the letter said. “We anticipate some down rounds, and a higher failure rate than in recent years.”
When asked how long the downturn would last, Mr Blair said trying to pick the market cycle was a “mug’s game”. “The companies we invest in are driven by structural tailwinds, they’re not cyclical,” he said.
“We’re in the business of making eight to 10-year bets and that’s what our investors expect from us.”
