hi allan, wrth gwrs, wrth gwrs, ac yn gweithio i'r CIM marketing podcast. Rwy'n gweithio yw mae'n gofyn ychydig, a yw'r gofyn yn gofyn, a'r gofyn yn gofyn yn gofyn yw'r gofyn, y cewd yn gwneud y cyfans, ac mae'n gweithio'n gweithio'n cyfans, ac mae'n gweithio'n gweithio'n gweithio'n gweithio'n cyfans CIM marketing podcast. Mae'n Gemma Buttler. Gemma, mae'r gweithio'n gweithio? Mae'n gweithio hynny ddweud wedi gwneud yn y mawr hwn. Mae'n adgen o ddaint wrth gwerthwyd.  I was former director of marketing here at Morhol for CIM and is now working again with CIM as an educator in the area of sustainable marketing. So what better way to start our spring season and I've already been in touch with you all indirectly by reading your article in the latest catalyst about green后ing Ac y% perna y flwysg c Personally I'm quite ironic that we're here to talk about sustainable marketing We want people to talk more about sustainable marketing We want people to do more about sustainable marketing And lots of companies you're telling me in your recent article Have stop talking about sustainable marketing Well, green hushing is a choice organisations and making Not to make green claims or talk about what they're doing in relation to their ti'n meirion i gyntafol'r gyflu amser. Roedden nhw'n oes iawn o'r llwyddonion respectsau druau ac esgolwyr, ac aelod yn cael yr yma mae'r gyflu'r gyflu'r gyflu'r gyflu yn ymhori. Dyflu'r gyflu yw'r gyflu sy'n ei masaf i'ch arwain yn nhw wedi wixam ar gwyseidu, ar y ddau sy'n ddalol i'r amser, a'r goddau ar hyn i ddod o hynny i ddigon gwaith gydliadol. Dyma, allan floedd yn gennym gael gweithio gyda pawr llog. Mae wedi fawr, mae'r fawr nesaf arfer. Mae'n hanen, mae'r fawr yn cynhwys iawn. Felly, wrth gwrs, mae'n gweithio drilid yn fawr fl confused â'r ei ddweud â'r icin ac yw'r cynnig. Yn arfer, mae'r lles yn gweithio'r icin, a mae'n gweithio cyhoeddiu, ac mae'n gweithio'r icin wedi'u llyfrgellu'i ymddangos hwn. Ym maeth iawn, a rôl eich cynnwys ac mae gael'r byddweithiowynt ac mae'n gael'u gael'u gwirionedog. Byddwn ni'n gael yn gynhyrchu. Yr gofydd, sef yn amlwg gwn y gyleu'r gweithio, roedd eich cynnwys i newid dyma. Roedd eich gael sydd gyda aheadd. Roedd yn fwy o'r bwysig yn y brwyff sydd cyntaf o fynd y bwysig o'r yn abordg ysbytym. Byddwn ni'n credu addysgu'r ysbytym. If you start with the evidence and then work back on what claims you can make from that, you should be completely sound in terms of the green claims you make. I think what organisations are doing is thinking that they have to fix everything now and that's impossible. If there's so much decarbonisation, biodiversity, all of these different elements packaging waste that they need to deal with and I think what they're saying is we won't talk about any of it because if we come out and talk about our decarbonisation targets, we'll get called out for other things. I think there's this balance. There is no 100% way to be sustainable. It's impossible. That's quite interesting isn't it? What you're saying is that there are areas in which companies are doing good and doing well. There are some areas and this applies probably to every company in the world where they're not doing as good and they're not doing as well. There's this phenomenon where if they start shouting about the things they're doing well, which actually you want to hear about because it's best practice and other companies can follow it, the blogosphere, the internet, etc etc, social media will then say the things that they're not doing well. If they put their heads above the parapet and they get shot down, in fact in many cases they are doing some good things but because they're not a universal good behaviour it's very easy to shoot them down. That's the world we live in sadly today isn't it? So how do we combat that as marketers? I think this is where we need to go back to looking at why we exist as organisations and our purpose. I think it's really important when you are, there's sustainable marketing and there's marketing sustainability and I think it's really really important that we broaden out the narrative and as marketers we go beyond our products and services and we look at how we can have a conversation about this, an ongoing conversation. Marketing sustainability is not a campaign and it should never be approached as a campaign. We have to have this consistent conversation and only through having that dialogue and that shared value and that two-way conversation can we talk about things and talk about our progress and be transparent. I think transparency is probably the number one thing that organisations need to be around this, a sustainable agenda. Lego tried something and it didn't work and they came out and said it wasn't going to work and it didn't work and there was a whole load of people that jumped on that but they were brave enough to say it didn't work. I think the next step is to come out with what they plan to do next around it. That's quite interesting though isn't it? So as long as you start by establishing an ongoing dialogue with your customer you can be pretty honest about what you're doing well and you can be honest about what you're doing less well and you can actually have a conversation with the consumer about how you can improve those areas, what would work for them as customers and you're less prone then to just being shot down as if you were strictly about what you were saying was that it should never be a campaign. So if we're going to do a campaign to show how green we are then you are putting your head up of the parapet and to be shot down because this is a one hit, you're trying to do it in one hit but if you're having an ongoing consistent dialogue with your customer around these areas you're much less at risk to those sorts of attacks. Absolutely, as I said it can't be approached as a campaign because you will essentially lose the essence. The focus has to be on sustainability if you're talking about sustainability not that you can make a claim about sustainability. Therefore by understanding your own impacts within your organisation having a sound sustainable development plan and they can change and they do change and targets move in and out and things don't work and things do work but unless we have these open and honest conversations I mean look how if sustainability was easy to solve we would have solved it by now but it's one of the biggest conversations happening in the world today it's one of the biggest challenges we face as humanity and we have to start talking about it. Do you think there are any or many companies that get the difference between treating it as a campaign and treating it as a conversation? I think there are many companies out there that do understand it absolutely and they are pulling together sound and strong sustainable agendas I think there is just this barrier when it comes to talking about it within society which is where marketing comes in, raising that S in ESG that we seem to be hitting a bit of a wall. So what would be your measures then to overcome that do you think? You've spoken in the past about changing narratives, talking more to the consumer understanding a little bit more about how consumer behaviour can be tweaked and changed so what measures would you employ to get from, to move from the campaign model to the conversation model to make the conversation model the default rather than the campaign model which we know is very flawed? I think from a start point marketers need to educate themselves on what's happening in the broader operating environment because there is so much changing consumer behaviours are shifting, what they want we're seeing that people want to live with purpose we're seeing that people want to shop with purpose and we need to look at that action, intention, intention, action gap and how we close that so I think marketers need to get educated and understand the wants of the markets which is their role and they need to bring those insights back in as a connective tissue between the organisations and society and then I think within the organisations they need to understand what's happening on their sustainable agendas and work with the sustainability teams or whoever is responsible for that and then sit down and think about the ways that they can have that dialogue how they can as we say more sharing less broadcasting and I'm not saying that you can't do a campaign on sustainability but where I would come in with that is you look at things like social marketing where you have that ongoing campaign that runs consistently at certain periods but then look at what you do on your social channels how do you talk about things, social impact companies do this brilliantly they talk about everything from their products, how they're made through to how you get people to engage on more sustainable behaviours you know refill and recycling and all of those models around circularity you know you're not going to change the narrative overnight but I think you've got to plan ahead and think about how you keep this conversation going It's interesting isn't it because you spoke in the past about things I've read from you and heard from you, this tension at the moment in the market between awareness and understanding so awareness is increasing amongst the consumer and also amongst the marketing industry but understanding is not necessarily increasing or certainly not increasing at a quick enough rate and what I mean by that is people are aware of the problem they're very very cognisant of the problem but they're not always clear as marketers or as consumers what they need to do to solve the problem Yeah and it's really interesting because that trend so Deloitte, Cantar, Porto Nevelli, an agency called Savanta is coming out with the same trend which is awareness and concern around climate change is growing and growing at quite a rapid rate and rightly so I mean you only have to look out of your window and it's affecting everybody across the world but a lot of the research that's coming out around terms associated with sustainability and sustainability terms is still incredibly low and if you think about the terms net zero, circularity, carbon neutral, carbon offsetting they're quite technical terms and was having conversation just yesterday around the fact that do consumers actually have to understand what these technical terms mean and I would say no because as marketers we should be the ones to almost explain and interpret those terms in a way and translate them into a way that consumers can understand so instead of talking about circularity we talk about reuse, refill, repair, all of those things and we focus on the behavioural side so they don't necessarily need to know what the circular economy is it would be great if they did but you have to meet people where they're at you have to meet people with something that's relatable to them to get them to engage There's a lot of professional scientific jargon around this stuff isn't there so the patois has developed that sustainability experts use and that doesn't always resonate with the consumer and that's a problem because you're hitting a brick wall and you don't understand these terms like circularity and what it means to them in terms of changing their behaviour I've got a real problem How big do you think marketers are so far at making those translations? I think some organisations, some marketers are doing it very well and it's a bit of a woolly answer but others are not thinking about it like that and I think that's because there's this focus on other things AI is also a massive conversation there's a lot of distractions out there but I think those that are doing it well are effectively using the right words and language and again I go back to the social impact companies if you look at the likes of who gives a crap Tony's Chocoloni, Too Good to Go, Olio just the words and language they use in relation to sustainability they don't use the S word they don't talk about sustainability they literally talk about behaviours Too Good to Go talk about rescuing food I think it's a really lovely way of talking about something they're saving 300 odd million meals as opposed to tackling food waste So what do they do Too Good to Go? Too Good to Go take food that is about to go off itself by date or they work with the likes of the coffee chains and independent retailers and independent cafes and things like that and they work with them in a partnership whereby food that is going to go off they bag that up in Not Too Good to Go themselves but they all got the independent coffee houses and such they bag that up and then they sell that off through the app and people go along and collect those bags of food they're almost like blind bags you don't know what you're going to get So similar to what you get if you sort of like me go to the supermarket at 9 o'clock at night because it's the quietest you often get these sort of bins where there's a whole bunch of bread and so on and so forth and you can get for tuppans and if you don't buy that evening it gets destroyed but they're actually automating that process and happy-fying that process so they can get that stuff out do you mean not working with the big multiples the big supermarkets as yet? When we interviewed Jamie Crummy the founder of Too Good to Go he talked about the fact that they've removed the stigma from the yellow labels in supermarkets people are now proud to go and rescue food when I go into the supermarket with my daughter to rescue some fruit and vegetables and it's a really great way to engage with but they have amplified it but they've also just started or not just recently they announced their partnership with Unilever and they work across Europe with massive, massive retailers so they are growing and they are doing things in different ways but they ultimately are tackling food waste It's interesting isn't it the language that you use there makes a huge difference you know, rescuing food rather than collecting waste food or reducing waste it just sounds more visceral it sounds like a positive step something that's fun to do that you're going to benefit from it's a great example of how marketers are going to introduce better language to change behaviours but we're still a long way aren't we from making that the norm Yes we absolutely are it's about, and I get this, the wrong way round all the time so you might need to cut this bit out but John Grant said to us we need to stop trying to make normal things seem green and make green things seem normal Yeah, yeah so if we're going to do that as marketers we need first of all to make people aware of what is green and what is not pre-pod you said something to me which absolutely resonated because I think it's one of those things where people do not realise they're having an impact I think people know that if they're chugging food away at home that's not green they know if they're buying stuff that is more packaging than food that's not green they know if they're buying stuff that contains lots and lots of chemicals that's not green but there are a whole bunch of activities that happen day to day which people aren't even aware of have a big environmental impact and give us some of those that perhaps might surprise our audience I think you're talking about marketing's carbon footprint aren't you I didn't want to put too fine upon to that and that's so there's marketing sustainability which is how you talk about your products and services and what your organisation does and the purpose and you go beyond those product services then there's sustainable marketing and that's aligning your marketing to the organisation's sustainable agenda and supporting it but that's also making sure that your marketing activities are sustainable and for example when we interviewed the environment agency every department in the environment agency has a carbon budget exactly the same as a finance budget you get x amount of carbon and if you go over that you can't do any more activity or you have to borrow it from another department can you buy it from another company no so you've got your carbon budgets and you've got your finance budgets so when we talk about carbon budgets and all organisations will need to have decarbonisation targets in place at some point moving forward and you know 2030, 2050 they're around the corner aren't they so when we talk about marketing's carbon footprint digital now has if you look at the numbers and believe the numbers and they do very slightly but ultimately digital not just digital marketing digital as a whole so all the streaming and the videos and the servers and everything has a bigger carbon footprint than the aviation industry but when you take marketing let's just put that one down and make sure that everyone who's listening to this pod has heard that digital marketing no digital not just marketing digital has a bigger carbon footprint than the aviation industry the latest figures I saw was around 2.5% for the aviation industry about 3.2 3.5 for digital you see I'd think that if you took 100 people off the street and asked them that question you would probably get something close to zero people thought that that would be the case that it was outstripping aviation I mean think about the power that AI requires and it's only going to get more power hungry or intense should we say but if we think about it from a marketing carbon footprint perspective the majority of what we do in marketing is digital why because of the reach because of the eyes and because the fact that in many cases stuff like email marketing doesn't cost an awful lot of money you can reach a lot of people in one go and every email has a tie everything in the world has a carbon footprint and emails have a tiny carbon footprint but we send last year we sent 322 billion emails a day How many of those were read? I think the latest click through figures is down under double digits and the bounce rates over 10% and if you imagine your own email habits how many people have email boxes that are just dedicated to spam how many people sign up to stuff that they never ever read the waste is catastrophic if you add all of that up and there's loads of debate over whether email is damaging or isn't damaging but ultimately if you were to put a cost against every email you sent you would have a very different behaviour so why do we not associate the same thing with carbon websites are the same so I looked at figures where it's estimated 576,000 websites a year are a day are created only 15% of websites actively in the world are are active only 15% of websites are active across the world and then we've got to think about things such as our advertising all of this comes with a carbon footprint associated with it so we do a lot of work with marketers around greening your channels do you even consider the impact your marketing is having and actually as marketers we should be looking at the impact of what we're doing is having naturally to see if it's having any cut through but I think the world of digital has opened up this spray and pray approach hasn't it you know you throw enough spaghetti at the wall and hope that some of it sticks it certainly has opened up the spray and pray approach we don't necessarily think that's a good thing in terms of marketing outcomes nevertheless never mind sustainability outcomes but it does strike me that if you are trying to make those changes you are looking at a huge culture shift in the sector that you've got to affect, where do you start? I think we go back to the basics don't we of right message right audience, right time and apply those and I think we just need to be much more mindful of our activities you know and this is where we also have to marry up you know out of home versus there's an interesting organisation called Unifida who do a carbon calculator and they have looked at the cost of traditional channels is higher in terms of monetary cost but the cost of carbon when it comes to digital is you know it completely flips that on its head so I just think as marketers it is something to consider we absolutely need to be thinking about how we green our channels we need to be thinking about the activity and also reducing that noise as well which we've been talking about for years there is so much noise we are served ridiculous numbers of ads every day the numbers vary depending on which report you read but ultimately when there's something like a 0.2% click through on ads that's a lot of waste and I think like the demand side emissions that marketing is responsible for with people purchasing products and the waste of those products generate I think we have to look at digital waste because it's it's off the charts it's interesting isn't it because we've moved from a sort of an attack on merch waste that people can see and that's in many ways easy for people to understand that you know you've got a conference to get a bag of plastic goods most plastic goods sooner or later end up in landfill people can see that that's wasteful and to some degree we've as an industry reduced that this is harder to envisage in your mind because you can't see it I mean does it actually is it ultimately going to come down to the heavy hand of regulation that you know governments are going to have to say two companies as you say you've got a certain carbon budget you've got so many employees you've got this is your turnover ergo this is your budget and you've got to stick to it and once you've been out of that budget you can't continue any activities unless you can find budget from somewhere else I'm not sure that government would be able to do that I think organisations need to take responsibility for that I think there's a lot of organisations out there who because of scope 1, scope 2, scope 3 emissions and those organisations that have decarbonisation targets there's very much you know when they go out to tender for business unless the organisations that come into to you know want to bid for that business don't have decarbonisation targets they are being they're not getting past the first gate so I think this is where within the business world pressure between organisations is going to hopefully come into play because your scope 3 emissions are basically out of your they're your supply chain they're all of the things outside of your control therefore you can work with somebody if they are not looking at their emissions that could blow your scope 3 emissions likewise marketing if they're not aware of their own carbon footprint couldn't blow the organisations scope 1 emissions because it is essentially you know not aware of the emissions that it's putting out there so we talk about the fact that the need for marketing to support it's organised sustainable agenda goes beyond just talking about sustainability and what the organisation is doing there is that physical carbon budget there that they also need to be aware of and support it's fascinating isn't it because the market the market is starting to work in some regard there with the SG reporting as you say and the fact that if you're a supplier you are contributing to your clients own carbon budget and if you are the client you also have your own carbon targets your own carbon targets to deal with so everybody in that supply chain is contributing to each other and it becomes a commercial imperative presuming that's the great hope is that that commercial imperative becomes ever stronger as we move forward and almost the market drives this rather than having to rely too much on government regulation and I think there is a place for regulation but we shouldn't be waiting to be regulated into doing the right thing let's talk about you it's fascinating stuff you're working with CIM Academy you're working separately partnering with CIM as an educator in the area of sustainable marketing people want to take one of your courses and they're going to need to load this stuff for the reasons we've discussed what sort of courses you're offering what are you doing so I teach for CIM Academy on their sustainable marketing qualification but with Can Marketing Save the Planet we are partnering with CIM on a range of online courses ranging from two hour bite size courses to eight hour full courses and they're accessible, they're scalable and we cover topics such as effective sustainable communication greenwashing 101 and they're just there they are there essentially to educate marketers to make them aware and to enable them to do sustainable marketing and market sustainability and presumably enhances their understanding greatly in a relatively small space so for a small amount of learning they can enhance their understanding very quickly Absolutely and we absolutely as marketers need to place a responsible lens over the work we do ask a different set of questions but to do that we need to be more aware and we need to assess Godin said when he came on our podcast to first of all we need to talk about it but to talk about it we need to understand it You need to understand it and there's a separate point here isn't there if you once you gain that understanding as marketers you are able to communicate that understanding better to the rest of the business which of course is a key role of marketing in so many areas you've got to manage up, you've got to manage sideways you've got to be able to know this stuff to communicate it and sometimes that's a great challenge isn't it for marketers? Absolutely I mean if you don't understand your organisation's sustainable agenda and it's not being talked about internally internal comms are just as important how can you effectively talk about what you're doing externally and I think that's a really really key point you raised there because marketing should be working with H as well as sustainability departments should be working with the HR departments on how do we break down that narrative and start that conversation internally because everybody's roles and the amount of which department you work in has sustainability in them What are the key mechanisms then to make the CEO listen to make the CFO listen to make the CHRO listen to make the key tools what are the tricks to get that communicated across It goes back to the age old we have to build a business case for it it's all well and good saying that this is the right thing to do for the planet this is the right thing to do for society but that will not ultimately get the buy in will it it has to also be a good business case and I think you can bring in the pressures that are mounting from investors from consumers wanting to live more sustainably shop more sustainably and also employees employees want to work for organisations that align to their values and there is a huge amount of climate quitting happening at the moment and if you look at the latest report from Deloitte GenZ and Millennials will walk away from organisations or not accept roles organisations that are not taking sustainability seriously so there is the stakeholder chain there's pressures at each stage of that stakeholder chain I think it's really incumbent on organisations if they want to get the best talent and retain that talent they have to take this seriously and they have to be seen to be doing something about it so building that business case you say for the boardroom there is plenty that can go into that business case from a regulatory point of view from a stakeholder pressure point of view but also good business is good for business there is so much evidence out there that those organisations who are taking sustainability seriously are making much more profit but it's not just about making profit often we forget that if you are more sustainable you are also more efficient and there are a lot of cost savings to be made as well so my business partner is incredibly optimistic I am incredibly pessimistic by nature but I am optimistic and I think that there is no better placed person than an aware and educated marketer to drive a more sustainable future That's a great call to arms Chairman but thank you very much indeed what an amazing conversation Thank you very much Thank you Ben


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Now, if you're in the investor at your home, please don't tell anybody in your house about this investment research, because if you share with your spouse, who is usually the designer in the house like I did, I showed this to my wife and she said, wow, what a beautiful piece of furniture. So I'll probably end up buying pieces of furniture for $3,000, become a member, have to redo the whole house and I will forget about my retirement savings, I will forget about everything I will have to work forever, not even till the end, forever to pay for all this overpriced furniture. So lock yourself somewhere where nobody will see what you're doing and enjoy this analysis. Good day, fellow investors. Welcome to RH Restoration Hardware Stock Analysis. It is a Warren Buffett owned stock, Berkshire owned stock, so it has a very interesting business model and I really want to discuss the company. And apart from selling overpriced, sorry, upscale furniture, it has a really interesting business model. So it might be a great investment and then it has really luxurious financial engineering, which will be a great learning lesson to see how financial analysis is done and the risk reward of investing and pushing the stock price higher. It's a very interesting stock and that's why I wanted to make a video. And also the learning outcomes, it's actually a positive investment situation for those that want to buy such a stock. Then we're going to discuss buybacks and financial engineering, how they can work really well until they don't. But if you sell sooner, then you don't care when they don't. And then stock price versus real business value creation. Let's start. The stock price was $32 in 2012, then it went up to $100, down again to $26, 2016, 17. And then it spiked 10 times almost to almost $250 just before this crisis and then it went down to $90 when I started researching it and we are already at $123. Very interesting. It's upscale, overpriced furniture, how you want to call it. It has an IKEA business model. It's well managed over the past years. Inventory levels went down and the management took 400 millions of cash from the inventory levels. However, there is extreme financial engineering using convertible debt and doing a lot of buybacks. And then on top of everything, to sweeten the analysis, the CEO sold 150 million of shares just in December 2019 to buy his nice beautiful mansions in the United States. Now, the business model. It's a very interesting business. So I love IKEA, the business model. I see how it attracts people. People love to buy stuff there and then also eat something, probably shitty food, but free food or for $1 breakfast. You don't want to find yourself in a Dutch IKEA on a Saturday or Sunday morning because everybody is crazy about those unhealthy breakfasts. So mea culpa for being there, but try to avoid that. Now, on the business analysis, it's an IKEA model.  And you can buy whatever you find there. You sit there. It's, let's say, an upscale entertainment environment that can sell you things. Then you can become a member and come back for more. It's a great business model because it's casual, it's luxury, socializing, and you buy what you like. And it still has revenues of 2.6 billion, so it's still scalable globally if the business model that has been proven that it works over the last years continues to expand globally. However, it's also extremely cyclical. Demand for overpriced furnishing products depends on discretionary purchasing power, real estate activity, and thus the general situation in the economy. Thus it makes no money in bad times, has to survive, but a lot of money in good times. And if we look at the revenue really exploded over the last 10 years, from 700 million to 2.6 billion, so there is growth. Line number one, line number two, margins are expanding 40%, 41% gross margins. That's why you're buying overpriced furniture, but it's the experience, right? Nevertheless, great gross margin leading to high operating incomes, good operating margins, and net income of 220 million in the last 12 months and earnings per share went from negative to $9 per share. Dividends not being paid, but the company Line 6 is doing huge buybacks and the number of shares since they started the buyback went down from 41 million to 19 million. The current non-diluted, 24 million is the diluted due to the convertible shares. That they have an anti-diluting thing, but we'll discuss that later in the financial engineering analysis. Then Line 7, the free cash flow, this company has $246 million of free cash flow when compared to the market capitalization. It gives you double digit free cash flow yield, so good business. However, there is practically no stockholder equity, or it is $18 million or $19 million shares outstanding, so the book value is practically $1 per share for a share that you are paying more than $100 for. The total liabilities are 99% of assets. Now, why there is so much liability? Because of financial engineering and extreme buybacks. In 2017, the company decided, okay, how can we take advantage of the low stock price because analysts were uncertain about their new business model of doing this big retail operations when everybody's going away from retail. They decided to go the opposite way. As you have seen in the video, built beautiful retail stores and it actually worked plus they started with humongous buybacks that pushed the stock price up nine times over just two and a half years. When you look at the repurchases of common stock, they paid $1 billion in 2017, $250 million in 2018 and another $250 million in 2019. So they spent $1.5 billion on buybacks and the market cap a week ago was $1.6 billion. The issue is that the cumulative earnings over the last three years were just $353 million and they spent $1.5 billion on buybacks. That is remarkable financial engineering. How did they do it? They issued convertible notes, $685 million of convertible notes. They lowered their inventory, which is excellent management. So they did something good. It's not just financial engineering, so they got $327 million there and they made profits of $353 million, as we said. All in all, almost close to $1.5 billion with a little bit of rebalancing. And that's how they did so much buybacks, lowered the number of shares outstanding by 50% and pushed the stock price up 10x. However, the whole idea is very interesting. They issued convertible bonds. So they pay late, they're in shares and they also paid to hedge the dilution and they issue warrants to hedge the dilution a second time at a higher price. This is complicated. I've written a full analysis report PDF for those that want to read about this interesting financial engineering practice in detail. So you can find that in the link in the description below. However, just quick overview. So they have issued 2024 convertible bonds and at zero interest rate. So $300 million, it was up to $350 million, the potential total offering size. However, on those bonds, they paid a hedge transaction of $91 million. So they got $350 million and they paid $91 million to hedge the transaction between the strike price of the bond at $211 and the strike price of the warrants. That was around $300 something. So no dilution will be until the price of $338 per share. So you get $350 million and you pay $91 million on that. So it's not zero interest, it's not zero coupon, but it works if the stock price goes up. So in this situation, the only goal the management has here is, of course, do business as good as possible, but push the stock price higher. Why is that? Why do they want to push the stock price higher? Well, don't we all want the stock price to go higher? Yes, but if that is your only goal, it's not creating a sustainable long-term business, then you have to move fast as a shareholder. And who is moving fast? The CEO, he got an option to buy a million shares for $50 if the stock reaches $150 or different targets from $100 to $150. And that was created the compensation scheme on May 2, 2017. What happened on May 4, 2017? Well, the company immediately announced 700 million repurchase plan. That's how you push a stock price higher and higher. And then you see this is a letter the CEO written during this crisis. First, I hope he took the picture before the crisis, not taking the time to make such a picture during the crisis. But then again, he is so confident, secure, happy, blessed during this crisis. So it's really a nice picture. Why is he so confident? Well, if you look at the Sec Form 4, he sold about 115 million of shares in December, 2019. Of course, if I would have 115 million in cash of my bank account in this crisis, I would be very, very happy, relaxed and calm. I wonder if all the other shareholders sold too. So the investment proposition is pretty simple. The management will do whatever it takes to push the stock higher, exercise option and sell more and more millions before the CEO retires. The best for the CEO would be a nice takeover, but he was waiting to still get the two, three years of options he has to get and then sell everything. The fact is that the stock price doesn't really matter for a buyer for a takeover. So it's the same for the buyer. If buying a company with 40 million shares at 100 or 20 million shares at 200 doesn't mean much for the buyer. It means for those that are willing to sell those shares. If you're a shareholder, you can buy this and then sell as stocks go up, because this is about playing the bike back game. And you have to see how that fits you. It is luxury financial engineering. And the risk is there too. A year of no profits and no cash flows due to recession. There is no book value. There is no protection. Creditors might want to own what is a good cyclical, scalable business. So creditors might want to dilute the current shareholders fast. The convertible bonds convert them into as many stocks as possible and then play the buyback game again. So that is the risk depending on how long this situation lasts and that can backfire. But of course, if you sold 150 million of stocks in December, then nothing can backfire anymore. My personal take at 1.5 billion in market cap with 200 million in growing cash flows in a good environment. It looks like a good business, a good deal, plus the scalability. But I'm looking for great businesses that focus on the business, not on financial engineering. I feel the financial engineering increases the risk. So you have to see how that fits you. I don't like really investments where I have to move fast, take advantage of the trend. But I still think in this current environment, it's sooner that the stock will go to 250 than 250 because if they can get another convertible loan on the small float, on the high short situation, they can push this very quickly to 250, the CEO can get his rewards and then sell it to someone in a year or two for 300 per share on no increase in market capitalization. If you enjoyed this analysis, stock analysis is what I do. So check my stock market research platform in the link in the description below on or on my website. Subscribe for more stock analysis and interesting stock market discussions. Thank you and I'll see you in the next video.


The theme of knowledge is a really powerful theme that's explored within Frankenstein. Indeed, remember the subheading of Frankenstein is the modern Prometheus. This notion that Victor Frankenstein, the creator of this creature, represents Prometheus. So the titan that stole fire from the gods and he gave it to humans, fire representing knowledge and then he was punished by Zeus, okay? So the destructive nature of knowledge and the destructive and continuous discovery of knowledge and humans pushing things too far, wanting to know things that are reserved only for the knowledge of God is explored within Frankenstein and of course science is used as the medium with which Victor Frankenstein tries to discover all of these hidden secrets of the world, hidden secrets that only God should know. And as a result, God punishes him just like the way Zeus punished Prometheus for seeking knowledge and giving this knowledge to human beings, okay? So this is a really important theme and it's explored of course in the character of Victor Frankenstein but also knowledge is illustrated through the character of Captain Walton. Indeed, it's his wish and his selfish wish for acquiring new knowledge, wanted to push the boat out further into the northern parts of the world and this pushes them into the Antarctic and then they get stuck, okay? And it's because he really wants to learn about new parts of the world but this is more for his own selfish discovery and then Victor Frankenstein wants him against this. Also, knowledge is illustrated through the creature itself. So the creature realizes human nature for what it is, human nature can be quite shallow. It can also be quite hateful and this knowledge drives him to become a bad person, okay? It's this knowledge of the dark side of human nature that leads the creature to detest all human beings, okay? So it's a very important theme that you need to be able to discuss in lots of depth and hence, as you can see behind me, I have prepared and selected the most relevant quotations you can talk about when writing about the theme of knowledge. So let's start with the beginning. Now this first quotation illustrates Victor Frankenstein's thirst for knowledge and how he uses science in order to discover things that many Victorian readers would have believed should have been only the preserve of God. Of course, in this case, what he wanted to discover was how to use science to create new life and it's only God according to Victorians who should know how to create new life and of course also take life, okay? Now here, this wish for knowledge and this selfish pursuit of knowledge is illustrated when Victor Frankenstein states the enticements of science ellipses. In a scientific pursuit, there is a continual food for discovery and wonder. So here we can see that Victor Frankenstein really fell in love with learning about how science can be used to really understand how the world works and most importantly how to create new human beings and this is what led him to create this creature. However, this is shown to be a very destructive wish, okay? Now, the word level analysis you want to focus on is firstly the repetition of the notion of science, okay? So science and scientific, this is repetition and this of course echoes Victorian fears at the time of scientific discoveries that were happening and this idea that we as humans were learning too much about the world through science and this could ultimately cause our demise and could make God angry at us just like how Zeus was angry at Prometheus, okay? Also the next word level analysis you want to focus on is this idea that science provides food for discoveries. Of course, this notion of food is a metaphor. What this is also showing is how science can be very alluring and it can seduce and tempt people into wanting to discover too much and this knowledge can be quite destructive. The second quotation relating to the theme of knowledge is when Victor Frankenstein once he discovers what he can do with science, he states, I cannot describe the delight I felt when I learned, okay? Now here again, this notion of learning, this notion of continuous pursuit of knowledge and how destructive it can be. How also it can make somebody very ambitious and this can lead to them developing a sense of hubris thinking that they are too powerful and this can be really destructive. Now the word level analysis you want to focus on here is firstly the repetition of the pronoun I, okay? And what this is illustrating is Victor Frankenstein wasn't necessarily using science and the knowledge that he was gaining to help the world. It was more to do with his own selfish ambition, okay? So also this is illustrating how knowledge can be used by humans for very selfish purposes. It's not always used for just to see how things can be made better for other human beings. Victor Frankenstein was only focused on creating this creature in order so that this new species can worship him again.  This is a negative motivation, okay? Also the other word level analysis you want to focus on is the alliteration of D in describing delight. And of course this is illustrating how Victor Frankenstein was so excited when he realized he could use science to create a new human being. The third quotation relating to the theme of knowledge is again, when Victor Frankenstein states, I shall satiate my ardent curiosity, satiate means fulfill, okay? So he knew what he was doing was wrong, but he couldn't stop himself. He then decided to even go to grave sites. You know, people see graveyards in places where their dead bodies are sacred. However, he was so consumed by this pursuit of knowledge that he ignored the sacred sanctity of a dead body. He would take all of these bits of different bodies and then put them together to create this new creature, okay? So this is illustrating how this pursuit of knowledge made him even do things that were very unholy, okay? Now, what you want to focus on in terms of word level analysis is firstly the sibilance of shell and satiate, okay? This is showing the insidious nature of knowledge. Also you want to focus on the adjectives ardent and curiosity, showing that he really, really only cares about really fulfilling this knowledge to the expense of even other people, okay? The other quotation relating to the theme of knowledge is now this is to do with Captain Walton. So remember Captain Walton, how the story starts is through a series of letters. He is pushing through the Antarctic. He wants to discover new parts of the world and with him realize he does this for his own selfish gains. Now, he then admits that one man's life or death were but a small price to pay for the acquirement of the knowledge which I sought. So here we can see that Captain Walton was driven by the same drive that pushed Victor Frankenstein, okay? So he really wanted to discover new parts of the world so that people can know him as the explorer. His knowledge was more for a selfish reason rather than actually thinking about, okay, how can I advance human knowledge and humanity, okay? And what this therefore led was for him to be willing to sacrifice the lives of others. Again, here we can see the dangerous nature of knowledge. The word of analysis you want to focus on is firstly the oxymoron of life or death, okay? Here we can see that he's so keen and so focused on, you know, discovery and making his mark on the earth and making his marks that everybody can remember him that he did not care whether people died in the process. Also, the other word of analysis you want to focus on is the alliteration of P in price and pay, showing that he literally would stop at nothing. This is Captain Walton because he was driven by the same impetus and the same wish for knowledge that Victor Frankenstein was driven by. The next quotation relating to the theme of knowledge is when Victor Frankenstein, again, here he's talking about how he really wants to create this new species and he states, I will pioneer a new way, explore unknown powers. And here this is to talk about this idea that he's now discovering the secrets of the earth. Secrets are only previously only known to God, but now he's so happy that he can pioneer. He can be the first person to create this new species of humans, okay? And this is illustrated through the verb pioneer and also the adjective unknown, this idea that he's using science in order to advance knowledge on how to create new beings. However, this is quite destructive and also this is a very selfish pursuit of knowledge. The next quotation relating to the theme of knowledge is when Victor Frankenstein states, and this is now him very consciously eluding and referring to the fact that he basically wanted to play God, he wanted to know the same information that God knew because he states, it was the secrets of heaven and earth that I desired to learn. And in terms of word level analysis, you want to focus on the notion of heaven and earth. This is what we call celestial imagery, okay? And here we can see that he almost wanted to play the role of God. Here we can see that this relentless pursuit of knowledge according to Frankenstein can make people so ambitious, so hubristic, they think that they can almost become God and this is portrayed as very destructive, okay? This ambition is portrayed as incredibly destructive. The next quotation relating to the theme of knowledge is now what the creature says when he realizes how horrible and evil human beings are, how much they're very shallow. So they look at him and because he looks scary, they run away from him or they attack him and there's this knowledge of human nature, the dark side of human nature. This is what causes him to become a terrible person, okay? This is what causes him to develop this grudge against humanity. He never had a problem with humanity beforehand but then once he realized what kind of people humans really are, he then realized the hypocrisy and the shallow nature and this is what caused him to detest human beings, okay? So here, again, we can see that knowledge has caused the creature who was really innocent before to become really hateful of human beings and the creature even reflects and states of what strange nature is knowledge, it clings to the mind. This idea that once he realized the real nature of humanity, he just could not stop thinking about how terrible human beings were, okay? So this new knowledge of humanity and human nature made him hateful towards human beings. Now, here, again, we can see the destructive nature of knowledge. Through first, see this exclamatory sentence when he says what strange nature is knowledge, he seems to be really tortured by this knowledge of human beings and this horrible side of human beings, okay? This is shown through the exclamatory sentence. Remember, an exclamatory sentence is a sentence that shows a strong emotion and it always ends with an exclamation mark. And then finally, of course, knowledge is personified as clinging to the mind. It's hard to forget, it's hard to unknown once you discover this really destructive knowledge, okay? So that's really it when it comes to key quotations and word-level analysis to do when you are writing about the theme of knowledge in Frankenstein, either for your course or exam. So thank you so much for listening.


Greetings from the United States. My name is Bob Adler and I'm one of the commissioners at the United States Consumer Product Safety Commission. I'm sorry I could not be with you in person today, but I was thrilled that Minister Bill Shorten asked if I could take a few minutes to talk to the round table about ATV or what you call quad bikes about the safety of these products. The timing of your comment period and round table relating to quad bike safety coincides nicely with the work we're doing in the United States. Just a week ago my agency held a two day summit relating to ATV summit. The summit was part of a larger effort focused not only on completing our pending ATV regulation, but it was also about how all of the stakeholders can work together to promote ATV safety. At the summit we were privileged to have experts and stakeholders join us from all over the United States and the world, including a number of panelists from Australia. I'm also aware of some Australian commenters that were not able to make the trip, but who indicated their desire to submit written comments for the record, which by the way remains open until November 14th. On behalf of everyone at the CPSC I want to assure you that your fellow countrymen were extremely well received and you are always a welcome part of this or any other conversation about product safety. As a quick note I need to make clear that CPSC's jurisdiction covers only consumer products and does not extend to products used exclusively or mainly in a work environment. I say this because from what I understand a large percentage of the deaths and injuries associated with quad bikes in Australia take place on farms, which I gather is usually a workplace setting. In fact I understand that quad bikes are the leading cause of injury and death on Australian farms. That said there's no question that there are too many deaths and serious injuries on ATVs and quad bikes regardless of whether they are occurring at work or at play. As we all know it's often the same injury scenario irrespective of the setting and we in the United States are seeing the same problem you face. Specifically there are over 10 million four wheel ATVs in use in the United States. I believe they are among the most dangerous discretionary use product for children in our jurisdiction. Each year there will be at least 700 funerals because of an ATV related incident. And while I realize the population size of our country is very different I understand that the US death rate is more than twice the rate you experience. As a regulator, as a policymaker and as a parent I find these numbers simply unacceptable. And sadly since 1982 the CPSC has received more than 11,000 reports of ATV related fatalities almost 3,000 of which have been children. Our injury numbers are even worse. Each year for every 100 ATVs in use there is more than one visit to an emergency room for an injury related to riding an ATV. Almost one out of four of these more than 100,000 emergency room patients will be a child under 16. And particularly disturbing to me at least one in five emergency room patients are likely to have been a passenger on the ATV despite explicit warnings on the vehicles that there should never be a passenger on single rider ATVs. But as tragic and significant as these numbers may be their only data points and what to do next falls on all of us in the ATV safety community. While I fully support efforts to educate riders to reduce risky behaviors and to increase the use of safety equipment, ultimately we need a safer vehicle. To that point I was thrilled to read that after the last round table you held in July you released a discussion paper calling for submissions on the review of design and engineering controls for quad bike safety. We're going to be monitoring your activities closely with the hope that what you learn can help us back here in the United States. I don't believe that ATV safety is an unreachable goal but I do believe it is an extremely difficult one. What gives me a degree of optimism is the fact that our recent summit which brought together a wide variety of interested and committed stakeholders produced a lot of useful information and creative ideas. I think it was a big step in the right direction and it sounds like the actions that are taking place in both the governmental and non-governmental spaces in Australia are moving in the same direction. There's no question that it is in the interest of everyone involved manufacturers, researchers, inventors, safety advocates, riders or parents of riders to work as one large ATV safety community to find common ground and common sense solutions to the dangers presented by ATV use. Only by moving in the same direction with the same purposes will we be able to reach our safety goals and reach those goals together. Thank you for your attention and your time and good luck with the rest of the round table.


This research proposes a new method for creating monolayer MOS2, which has been shown to have excellent properties for use in lithium ion batteries. The method involves replacing some of the molybdenum atoms in the monolayer with cobalt atoms, which creates a space-charge region that allows for faster ion transport. Additionally, the cobalt atoms also reduce the band gap and increase the lithium ion diffusion energy barrier, resulting in improved performance. This article was authored by Mei Xinghan, Yong Biao Mu, Jin Songhua, and others.