ASX News Live | ASX Rises; BNPL Sezzle and Zip Surge

Online bookseller Booktopia is up 30% after a review led the retailer to implement initiatives expected to deliver $12-$15 million of annualised improvements to earnings in ‘FY24 and beyond’.

The review was triggered by ‘changing consumer sentiment, greater competition online, and inflation.’

What are the initiatives aimed to boost earnings?

Booktopia will raise prices for some products to safeguard margins.

The book grocer will also change how it ‘recovers third-party delivery costs’, expecting this to lead to a $4-5 million annualised earnings boost.

Of course, ‘earnings improvements’ usually involve redundancies. Booktopia will cut 30-40 jobs, which should lead to $4-5 million in cost savings.

Booktopia Chairman Peter George stated:

“Booktopia is focused on building a profitable, sustainable business in the interests of all stakeholders and is committed to delivering the Next Gen CFC in 2023 which will position the Company for the challenging online retail conditions in the near term. Letting some of our talented staff go as part of these cost cutting initiatives is a disappointing but necessary step in these economic times.”

If nascent artificial intelligence technology can already earn a passing grade on an MBA exam at Wharton, what next?

AI lawyers?

AI lecturers?

AI consultants?

AI marketers?

Clearly, many knowledge workers are nervous, me included. Will we see ASX live updates churned out by a chatbot owned by Commsec or Refinitiv in the next five years?

(Probably. Wall Street Journal already has an AI article-writing tool. And last week Futurism reported that CNET has been surreptitiously publishing articles written by AI, to editors’ and readers’ chagrin.)

So how can professionals imbue their work with an essence AI can’t replicate?

Being weird.

In an upcoming book, Four Battlegrounds: Power in the Age of Artificial Intelligence, Paul Scharre shared an anecdote about a time the US military tasked soldiers to train an AI system to detect human motion.

The training then took a turn. The soldiers were asked to approach the AI system undetected, having spent days training it to do the opposite.

As the Washington Post reported:

“The robot failed to detect any of the soldiers. To beat the AI, the participants chose to move not like regular human beings, but instead in ways that have more in common with cartoon or video game characters.

“Two somersaulted for 300 meters; never got detected,” writes Scharre, quoting a source named Phil, who is not identified in the snippet of the book posted by Joshi. “Two hid under a cardboard box. You could hear them giggling the whole time.” The AI system had been trained to detect humans walking, not humans somersaulting, hiding in a cardboard box, or disguised as a tree. So these simple tricks, which a human would have easily seen through, were sufficient to break the algorithm.”

I came across a telling snippet from the Davos Conference.

The snippet in question was this one.

In it, head of JPMorgan, Jamie Dimon — a long-time crypto critic — can be seen uncomfortably shuffling in his seat as the hosts of CNBC ask him about Bitcoin [BTC].

He calls it a ‘fraud’ and a ‘Ponzi scheme’ that’s ‘going to zero’.

But you can tell he doesn’t want to talk about it at all.

Full credit to the CNBC hosts here, though. They gently push him to explain his position, and this is where it unravels…

First, he admits blockchain technology is real and useful; that JPMorgan even uses it!

He then makes an outrageous and frankly stupid claim about bitcoin’s scarcity.

When he gets pinned down on that lie, he makes a stupid joke about Satoshi — the anonymous founder/s of Bitcoin.

To anyone who knows the first thing about Bitcoin, this was as telling an interview as you’ll see.

Because either Jamie Dimon is ignorant of how Bitcoin actually works — which is bullish for bitcoin — or he’s scared — which is even more bullish!

For example…

On his first point, Bitcoin is a blockchain — the world’s first one — so to call it a Ponzi but somehow say blockchain tech is good is some impressive mental gymnastics.

Maybe the real reason is this?

Source: CNBC

It seems to me that JPMorgan has worked out they can make more money from ‘crypto’ than they can from bitcoin.

On his second point about bitcoin’s in-built scarcity…

The fact is to change bitcoin’s code — and alter the 21 million hard cap — you would need the vast agreement of a decentralised network of tens of thousands of nodes that operate all around the world.

These nodes are run by ordinary people (I run one), and no central party can do anything about it.

That’s really what Dimon hates — and above all, fears.

Bitcoin is a network he can’t control. Bitcoin is money he has no advantage in. The Bitcoin Network removes the need for middlemen like him.

As lead analyst at Swan Capital, Sam Callahan, noted on Twitter:

Lastly…

On his joke about Satoshi?

Well, clearly, he was just trying to get out of the hole he was digging.

The long and short of it is I wouldn’t listen to the first thing this bloke has to say about Bitcoin. His only motivation is self-interest.

Too bad for him.

Because Bitcoin doesn’t care about the Jamie Dimons of the world…

https://www.moneymorning.com.au/20230123/this-is-what-real-fear-looks-like.html

Who needs a crib sheet when you can use OpenAI’s wildly popular — and ethically contentious — AI chatbot ChatGPT?

ChatGPT earned a passing grade and outperformed some students on a Wharton MBA course. Wharton is one of the oldest and most prestigious business schools in the world.

Some of the brightest entrepreneurial minds enrol at Wharton … and ChatGPT was able to earn a B to B- grade on an exam for a core MBA subject.

The revelation comes from Wharton professor Christian Terwiesch, who decided to test concerns in academia about AI tools like ChatGPT.

ChatGPT’s passing grade surprised Terwiesch, who published his findings in a white paper Would Chat GPT3 Get a Wharton MBA?

“The value of any skill depends on how useful the skill is in the world as well as on how many others are out there mastering the same skill. Prior to the introduction of calculators and other computing devices, many firms employed hundreds of employees whose task it was to manually perform mathematical operations such as multiplications or matrix inversions. Obviously, such tasks are now automated, and the value of the associated skills has dramatically decreased. In the same way any automation of the skills taught in our MBA programs could potentially reduce the value of an MBA education.

“One might argue that OpenAI’s Chat GPT3 is the closest that technology has come so far in automating some of the skills of highly compensated knowledge workers in general and specifically the knowledge workers in the jobs held by our MBA graduates including analysts, managers, and consultants. Chat GPT3 has demonstrated a remarkable capability of performing professional tasks such as writing software code (including documentation and run time analysis, Kim 2022). It also performed well in the preparation of legal documents and some believe that the next generation of this technology might even be able to pass the bar exam.”

Terwiesch’s white paper is a great read. The professor is fair in his assessment of ChatGPT’s strengths and limitations and is thoughtful about AI’s implications.

“The moment I saw the answer to my first question, I fell in love with Chat GPT3. I had used other natural language processing and AI software before, but this simple user experience and the great answer put me in a state of awe, and I am sure it has impressed many users before me.

“But we should not forget that it made major mistakes in some fairly simple situations. Being off by a factor of 10x in the receiving station of Question 3 is below the academic performance of a middle school student. The average grade of Chat GPT3 was a B to B- in a domain that is well documented in thousands of pieces of knowledge that are accessible online. We have many reasons to believe that the technology is getting better over time. But, we are still far from an A+ for complex problems and we still need a human in the loop.”

For those interested, here is the first question Terwiesch cited and ChatGPT’s “A+” response:

Source: Christian Terwiesch

US Federal Reserve whisperer — Wall Street Journal journalist Nick Timiraos — has indicated that US Fed officials are preparing to slow interest rate hikes for the second straight meeting.

The slowing of interest rate increases should give the central bank time to assess the fallout of its steep rate hikes last year.

When the Fed passes a 0.75% rate rise, the effects aren’t fell the next day. Instead, they percolate through the system for weeks. The consequences of monetary policy aren’t immediate.

Fed Vice Chair Lael Brainard said the Fed should heed this logic:

“And that logic is very applicable today,” said Fed Vice Chair Lael Brainard in remarks last week. Raising rates in smaller increments “gives us the ability to absorb more data…and probably better land at a sufficiently restrictive level.”

ASX BNPL stocks — beaten to a pulp in 2022 — are staging a rally in recent weeks.

Today shapes up to be another green day for instalment firms, as Sezzle reported its second consecutive month of positive net income.

• Sezzle is currently up 20%
• Zip is currently up 14%
• Splitit is currently up 14%
• Afterpay-owner Block is currently up 6%

But smaller BNPL firm Laybuy entered a trading halt today after applying to be removed from the official list of the ASX. Further detail is expected by Wednesday.

ASX #BNPL stocks — beaten to a pulp in 2022 — are rallying in recent weeks.

Today shapes up to be another green day, as $SZL reported its 2nd month of positive net income.

– $SZL currently up 20%
– $ZIP currently up 14%
– $SPT currently up 14%
– #SQ2 currently up 6%

— Fat Tail Daily (@FatTailDaily) January 23, 2023

Sezzle does not expect ‘any near-term capital needs’ due to what management characterised as a ‘strong liquidity position and operational performance’.

As of the end of December 2022, SZL had US$69.7 million of cash on hand and US$65 million drawn on its US$100 million credit facility.

At the end of September 2022, Sezzle had $US57.9 million in cash and cash equivalents.

Source: Sezzle

 

BNPL firm Sezzle opened 20% higher on Monday following a second straight month of profitability.

In a release of unaudited preliminary 4Q22 results, Sezzle reported revenue for December rose 15.7% year on year to US$13.6 million.

Sezzle said this marked a new high when looked at as a percentage of underlying merchant sales (UMS) of 9.7%.

The revenue growth contributed to SZL’s second consecutive month of net positive income, with December’s net income hitting US$1.8 million.

Year to date, the BNPL stock is up 55%, albeit still down 70% over the past 12 months.